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BUSINESS JETS FOR CHINA:
The Trends to Watch

China set to grow
China- with its large population and growing wealth- may soon unleash an insatiable demand for new business aircraft- to become an enormous new market and a perfect sales environment for the industry. Market analyst Brian Foley of Brian Foley Associates remains cautious in his outlook though: “This is true in part- but is not quite realistic yet.”


Roughly 18-000 business jets are registered today globally- with 131 on the Chinese register. China has done a lot to make the country more Business Aviation friendly. Most importantly the government seems to be open to new ways of welcoming private aircraft- yet obstacles to growth still remain.

Infrastructure is the major obstacle. Not quite 200 airports are open to civil use- while- airspace is controlled by the military- with airlines receiving top priority. Although business jets provide flexibility- their use is hampered- at least for now.

Nevertheless- Foley contends China still will be one of the fastest-growing regions for business jets - perhaps the fastest.

'What impresses me is that aircraft delivered in the last three years now represent over a third of the Chinese business jet fleet-' Foley says. 'Furthermore- their fleet tilts toward the larger- more expensive models needed to travel the great distances characteristic of the region…and there is no slowdown in demand.

“China will account for 3-4% of worldwide fleet uptake over the next decade (roughly five times what it is today)…China promises to be a welcome adjunct to manufacturers’ business at a time when every additional sale counts.”

More from
www.BRiFO.com

Good News for Business Jets
The demand for business jets in China is rising as fast as the business market itself- according to Corporate Jet Insider. For example- Minsheng Financial Leasing will increase its fleet with the purchase of more jets.

In less than two years the company intends to carve out a quarter of the whole Business Aviation market in China. So far it has ordered 32 aircraft- and plans to take that number to 50 by year-end- with 20 jets in operation. Within three years Minsheng says it wants to bring 100 aircraft into China.

Minsheng Financial Leasing is indicative of the market in China- and it is hoped many new companies will form there with the need for corporate jets rising as a result.

More from
www.corporatejetinsider.com

BAA Jet Management
Headquartered in Hong Kong with Aircraft Operators’ Certificates in both Hong Kong and China (courtesy of a JV with Shenzhen Airlines) BAA manages fourteen aircraft: four Gulfstream G200 aircraft- three Gulfstream G450s- one Gulfstream G550- two Airbus A318 Elites- one Falcon 900EX- one Bombardier Learjet 60XR- one Bombardier Challenger 605 and one Hawker 4000.

As of January 2011- according to sales director Jeff Lowe BAA will add ten more aircraft this year- comprising two Bombardier Challenger 850s- three G450s- two G550s- one Learjet 60XR- one Dassault Falcon 7X- and a further Airbus ACJ Prestige.

The company has also taken on 80-000 square meters of land in Tianjin and has set up a JV maintenance company BAA Maintenance and Technic- set to break ground in May 2011 and open in September 2012.

More from
www.baaasia.com

ACBJ's Fleet Expanded to Seven
Strong growth figures from Beijing-based Business Aviation service company Air China Business Jet have been indicative of the great potential for the Chinese Business Aviation market despite the global economic downturn. The company's fleet expanded to seven business aircraft at the beginning of the 2011- and over the remainder of this year the fleet is expected to grow to 12.

More from
www.airchinajet.com

CAIGA to Acquire Cirrus Industries
Cirrus Industries- Inc. (Cirrus) and China Aviation Industry General Aircraft Co.- Ltd. (CAIGA) have entered into a definitive merger agreement pursuant to which CAIGA will acquire Cirrus.

Brent Wouters- Cirrus's President and CEO- commenting on the transaction- noted: 'This transaction will have a positive impact on our business and our customers- because we share a common vision with CAIGA to grow our general aviation enterprise worldwide.”

Meng Xiangkai- CAIGA's President- added 'We are very optimistic to begin our partnership with Cirrus and add Cirrus's strong brand as the cornerstone in our aviation product portfolio.

Cirrus manufactures some of the best-selling piston aircraft- but also has a single-engine private jet aircraft in development.

More from
www.cirrusaircraft.com

GENERAL TRENDS TO WATCH
Business Aviation enables companies and entrepreneurs to use time efficiently- so it is worthwhile observing trends in time required to obtain access to airspace (i.e.- receive flight clearance from Chinese authorities). Reduced time between when a request is made for airspace access - whether a clearance to fly into China- to fly domestically within China or to exit China - will be an indication of the government’s intent to facilitate the use of business aircraft.

Trends in access and airport fees reflect the degree to which officials appreciate that Business Aviation is an enabler of economic growth and should not be treated as a revenue source. Excessive fees discourage the use of business aircraft and thus are counterproductive to reaping the benefits derived from their use.

Media attitudes toward Business Aviation reflect acceptance of this form of air transportation. Watch for increasing recognition by opinion leaders that business aircraft are business tools enabling growth.

Governance of China’s air traffic control system- which is in the hands of the military- will be a key indicator of China’s movement toward greater efficiency and flexibility in airspace access. Greater input by civilian authorities will be a strong indicator of China’s appreciation of the important role of all forms of air transportation.

Growth in hours flown by the various elements of Business Aviation (e.g.- charter- managed aircraft- shared ownership and whole-aircraft owners) is a key measure worth tracking- as is the number of aircraft purchased for use within China.

The number of airports created as well as the time to approve and construct new landing facilities should be watched closely.

Enrolment in pilot and maintenance schools will be an indication of growth within the Business Aviation sector. Without support for aviation education- growth will be limited.

Organization of the Business Aviation community within China is an important indicator. A strong association that has effective avenues of communication with China’s civil aviation authorities- and broadly represents the interests of the entire community of business aircraft operators and suppliers- will be an important factor in the growth of Business aviation within China.


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