China Aviation Demand Growing

After all the hype and false starts, China’s business jet fleet is not only expected to grow to 300 aircraft by the end of 2011, but with the growing enthusiasm from the Chinese nouveau-riche has a good chance of meeting that forecast.

The China Daily newspaper announced recently that Luxury Asia Ltd sold 15 business jets into China in 2009 and aims to sell 20 more this year.

Show News research suggests that there are already around 100 aircraft ranging from Airbus A318 Elites and the first Chinese registered BBJ, down to many 6-8 seat Cessna Citation models registered there. Aircraft imported recently include the first Dassault Falcon 7X, a Hawker 4000 and two Bombardier Global 5000s.

The recent revelation by China’s Deer Jet (a subsidiary of Hainan Aviation Group) that it will be adding a 29-seat Airbus ACJ and a BBJ to its fleet of 23 business jets, and expanding to a 35-ship fleet by year end, is significant. Deer Jet’s April agreement with Comlux to develop VIP charter markets in Asia, Central Asia and Europe is also a sure sign that this high-end business jet charter market has already attracted worldwide recognition.

Add to this list the 12 long-range business jets ordered by MinSheng Financial Leasing Co. Ltd (of Beijing) last year and its latest revelation that it will acquire another 13 aircraft this year, and then that “300 by 2011” wouldn’t seem impossible. What we don’t know is if some of these orders are linked with Deer Jet’s fleet expansion of owned and managed aircraft through MinSheng and are therefore being counted twice.

London-based David Tang, chief business aviation legal advisor to MinSheng, says activity has been frantic over the weeks preceding EBACE. Much of this was connected with the Hainan Rendezvous (April 2-4) where over 150 VVIP guests were flown into the luxury resort of Sanya by business jet. Sanya is fast becoming the Chinese Riviera and luxury yachting Mecca for the well-heeled, and another 4,000 high net worth Chinese individuals were invited to the event from across Asia. Show partners included Boeing Business Jets, Cessna, Airbus Corporate Jets, Bell Helicopter, Dassault, Embraer, Gulfstream and Eurocopter. There were some 10 aircraft on show and although no deals were signed, Tang says “It was very productive”.

He says that MinSheng is allowed only to lease aircraft to Chinese nationals, and is offering a package of services from initial OEM contact, selecting the right aircraft and arranging the finance. “We also save aircraft lessors the 23.8% foreign importation tax,” said Tang, as MinSheng imports and owns the aircraft. Its first Gulfstream G450 arrived in Beijing on April 1. The pilots are completing type ratings and the aircraft should be ready for work by early May. The next two aircraft are to be delivered in May and July. MinSheng has also had discussions with Bell Helicopter for potential VIP and utility equipped helicopters.

MinSheng has set up its “Aviation Club” at Beijing’s exclusive Scent Hills Golf Club with Hawker Beechcraft, Bombardier, Gulfstream, Cessna/Bell Helicopter and Airbus as members. This point of contact for China’s upcoming jetset allows MinSheng to promote the advantages of business jet travel and aircraft purchase to a captive audience. Previously there was very little dialogue between the business jet OEMs and high net worth individuals. The Aviation Club is seen very much as a facilitator. “Golf club members very often witness these business jet signings and want to know more,” says Tang.

From the information gleaned from various sources it seems that of the long-range aircraft, Gulfstream leads with around 19 registered in China. Bombardier has five or six while Dassault currently has four.

The number of ACJs sold to China is “around 20” says Airbus, but it doesn’t differentiate between China, Macau and Hong Kong or say whether that includes aircraft on order as well as delivered. To be picky the number of Chinese-registered Airbus CJs is four: Deer Jet has one A319 airliner outfitted for corporate charter, plus one ACJ due for delivery this year; a Chinese-registered A318 Elite (tail numbered B-6186) is operated by BAA Jet Management of Hong Kong in a jv with Shenzhen Airlines, but only one of four ACJs operated by China Sonangol International Holding Ltd is actually registered in China, as B-6188.

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