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TAG AVIATION ASIA

Jolie Howard discusses the Southeast Asian Business Aviation scene

Hong Kong-based Jolie Howard- Director- Business Development at TAG Aviation Asia- spoke with BizJet Advisor about what’s happening in Southeast Asian Business Aviation at this time.

TAG Aviation Asia is a majority-owned subsidiary of TAG Aviation Holding S.A. of Geneva- Switzerland and specializes in aircraft management- charter- brokerage and business jet maintenance. TAG Asia’s first Airbus ACJ was delivered in May- adding to its Hong Kong managed fleet of 23 aircraft (the fleet also includes 13 Global Express- Global 5000- Challenger 605 and G550- G450 and G200 aircraft).

The company holds a Hong Kong CAA Aircraft Operator’s Certificate (AOC) and its fleet has grown steadily since TAG Asia was formed in 2006. In 2009 it attained a Hong Kong fixed-wing Business Aviation AOC- adding private jet charter to its aircraft management arm.

“New business jets are arriving in Hong Kong every four to six weeks-” Howard revealed. “We have seen one hundred percent growth in our managed fleet in the last 12 months. We’re trying to put in enough resources to cope with the growth.”

She sees the trend continuing through year-end and into the first quarter of 2012 with the proviso- “It all depends on how the world economy affects this region. At the moment there is no problem- but from the second quarter it will be hard to say if it will continue at the same pace. Even if the economy slows I don’t see deliveries slowing down too much - more aircraft deliveries are booked through 2012- 2013…I’m still very optimistic generally- and so are most in the industry out here.”

TAG Asia’s managed fleet consists of aircraft registered on a number of different registers - but the company does not operate China mainland-registered aircraft at the moment. “Aircraft are mainly being bought by the Chinese and some want to keep their aircraft outside China - even though the owners may spend a lot of time in Beijing and Shanghai- they have the need to fly overseas-” Howard explained.

70% Business Jet Growth
Howard reckons that business jet growth is up around 70% year-on-year in the greater China area- Singapore- Malaysia and Indonesia. Surprisingly perhaps nearly all the aircraft arriving are privately-owned (operated under management and not for charter).

“Clients in this region very much want to have the use of their aircraft when they want it and are not concerned about generating extra revenue and off-setting costs by chartering-” Howard observed. “Most of these airplanes are not bought by companies but by individuals. Owners want to keep control of their aircraft.” (Of TAG Asia’s 23 airplanes only two (a Challenger 605 and a Global Express) are available for charter- but even these are not dedicated charter aircraft and are only available in quiet times.)

“We do have a lot of enquiries for charter- and we help clients from all over the world by using supplemental lift. This trend is growing- but there are just not enough charter aircraft in the region at the moment.” Release of more aircraft for charter could come about as owners buy new aircraft and decide to charter out their older aircraft.

“We get requests for long-range aircraft capable of HK to Australia or HK to Europe- but also for shorter range smaller cabin aircraft suitable for flying into China and South Asia-” Howard revealed- adding that there is a regular need for ACJ/BBJ-sized aircraft when larger numbers of people need to be flown. “I see people upgrading from Challenger 605s to Global Express and Gulfstreams; and also perhaps 30% of our clients looking at upgrading to ACJ/BBJ-sized aircraft for long-haul flights.”

Easing Regulations
“It’s also encouraging to see the easing of regulations in lots of Asian countries-” Howard stated. “In China we can now get a landing permit for one of the international cities within 24 hours- rather than the three-five days of a few years back.

“Airports in Japan are much improved as well- with permissions granted in one day (it used to be a minimum of three working days). Even in Tokyo Haneda you can get permissions in a very short time if Japanese authorities have a slot available. This is a very encouraging trend and will inspire more people to buy business jets and grow the business.

Hong Kong is the closest Business Aviation maintenance base to China- apart from Hawker Pacific’s joint venture at Shanghai’s Hongqiao International Airport. Hong Kong’s one major problem- though- is its limits for expansion. “Even though people keep their aircraft in- say- Beijing for most of the time- they have to fly them to Hong Kong for maintenance. The various maintenance companies in Hong Kong have all the major maintenance service center approvals so it has become a hub for Chinese business jet maintenance.”

Eventually China will have more maintenance centers like Shanghai. As more of these facilities open-up- maintenance work on Chinese aircraft will inevitably decline in Hong Kong- Howard believes. “At the moment Hong Kong is in a beneficial position but in order to keep the business- companies will have to keep up competitiveness.”

Of TAG Asia’s own plans for the future- Howard says that a new hangar is to be completed in the next six to nine months - and she hopes that ramp space can also be enlarged. “Ramp space only allows for around 25 aircraft to be parked but regularly there are more than 40 present.” [Remote parking is the only option currently- and business jets regularly have to park on cargo or commercial airline stands.]

TAG Asia is also a few months away from gaining its Repair Station license to initially provide line maintenance capability for Global- G550/G450 and Challenger 605 aircraft.

“The goal is to expand- and we’re putting lot of resources into this area right now. We’re very optimistic about the market here. TAG Asia has very good potential to grow- and we’re definitely here for the long-term-” Howard concluded.


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