Home' Asian Aviation : AAV November 2011 Contents AndrzejJeziorski
Business aircraft manufacturers attending this year’s
National Business Aviation Association (NBAA) Annual
Meeting and Convention in Las Vegas had good reason to
worry. The US economy is on a knife-edge and the words
“double-dip recession” are on everyone’s lips.
North America is where business aviation began about
60 years ago, and it still home to some 70 percent of the
world’s business-jet fleet. But new aircraft orders from the
market remain few and far-bet ween – with more activity
in emerging markets such as China – and the segment,
the hardest-hit of all segments of the aerospace industry
by the 2008 downturn, is still struggling with a major
With ever more details emerging of foul-ups on Wall
Street prior to the 2009 global recession, users of corporate
jets are facing public criticism as ne ver before. They are
portrayed as out-of-touch, selfish, uncaring – the Marie
Antoinettes of America’s current economic woes.
The NBAA and the General Aviation Manufacturers’
Association (GAMA) have taken up arms against this
portrayal of the industry and its customers. The groups have
launched a joint advocacy campaign known as ‘No Plane No
Gain’ to explain the value of business aviation to citizens,
companies and communities across the USA .
The campaign has been running for more than a year, but
is facing an uphill struggle as ‘Occupy Wall Street’ protests
take hold, spreads around the country and beyond and grab
Still, there was much optimism at the NBAA show. If the
North American market is troubled, manufacturers will look
elsewhere, to emerging markets and developing economies.
The biggest new aircraft orders announced during the
three-day event in Las Veg as came, after all, from China,
as Minsheng Financial Leasing ordered 13 Embraer Legacy
650 business jets and signed a preliminary agreement for 20
Dassault Falcon aircraft.
“China has a very low number of business jets relative to
the size of its economy and is now entering a high growth-
rate phase for its business jet fleet,” Canadian manufacturer
Bombardier Business Aircraft wrote in its latest market
forecast, covering the period 2011 to 2030. North America,
on the other hand, may have the world’s largest fleet, but is
growing “at a low rate”.
Bombardier says projected growth of a country’s Gross
Domestic Product (GDP) can be used to forecast “the likely
trajectory of the business jet penetration for each region”. As
an economy develops, the expected growth of the business
jet fleet in each region can be reasonably predicted over the
Goldman Sachs Asset Management defines a ‘Growth
Market’ as any country outside the developed world that
is responsible for at least 1 percent of global GDP. These
economies are most likely to “experience rising productivity
coupled with favourable demographics and, therefore, a
faster growth rate than the world averag e going for ward”.
In Asia , such markets include China, India , Indonesia and
“ We expe ct a significant share of business jet deliveries
to originate from these Growth Markets,” Bombardier says.
The manufacturer predicts a global need for 24,000
business jet across the light- to large categories b etween 2011
and 2030. In China alone, as reg ulatory and infrastructure
barriers are removed, the country’s business jet fleet will
grow from 150 aircraft in 2010 to 2,470 in 2030.
Bombardier expects 2,360 new business jet deliveries to
China over the next t wo decades – 960 bet ween 2010 and
2020, and another 1,400 between 2021 and 2030.
During the NBAA convention, Jason Liao, chairman of
the China Business Aviation Group, pointed out that there
are already today more than 3,000 individuals in the country
with a personal net worth in excess of US$500 million. That
figure is growing rapidly, he said.
Thus, the financial means for business jet acquisition is
already in place, as is the will. But other factors remain which
hamper the sector’s growth there.
In China, as in India, there are almost no fixed-base
operations (FBOs) to support business aircraft. Likewise,
parking spaces and hangars are scarce. Reg ulatory restrictions
on airspace use also remain in place hampering business-
a ircraft operations.
Liao says the Civil Aviation Administration of China
(CAAC) is prioritising efforts to remove such constraints
on the industry, adding that he expects a large number of
FBO developments in the near future. But that still leaves a
lack of trained pilots and maintenance personnel that will
initially only be solved by hiring expatriates.
Once these issues are tackled , in China and Asia’s other
growth markets, then business aviation can realize its true
potential in the Asia-Pacific region
China offers hope to
business aviation sector
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A message will be sent back with a link
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“China has a very low number of
business jets relative to the size of
its economy and is now entering
a high growth-rate phase for its
business jet fleet.” – Bombardier
28/10/11 9:09 PM
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