Supporting industries booming due to China's soaring private jet market

Supporting industries booming due to China's soaring private jet market
Posted: 14 June 2011 2244 hrs
 
SINGAPORE : Economic powerhouse China is expected to see a surge in the number of private jets in Asia within the next five years.

But experts said the biggest winner will be the supporting industries such as aircraft chartering and maintenance that will see new growth opportunities.

China, which has over 110 private jets now according to industry data, is expected to overtake Australia & Oceania - the largest now at over 160 private jets.

China's market is booming because its registered private jets are a fraction of the 15,000 jets registered in the US, but the world's second largest economy has 4 times the population of US.

Leithen Francis, Asia editor at Aviation Weekly said: "Unlike the United States where you tend to get an individual or company that's maybe owned business jets for decades, so they trade in their old business jets to get a new jet, what's different about China is that 90 per cent of customers are new to business aviation; they have never operate business jets before."

And secondary industries like aircraft chartering companies are on the rise, as private jet demand grows in the region.

Jet chartering firm Chapman-Freeborn said it has seen new customers from its recently launched aircraft booking application.

"A lot of people are spending their time on phone devices, smartphones and we want to implement the private jets usage into these devices just to convert them into an easy way to travel. People think that booking a jet is not like booking a (airline) seat, that it is difficult. But a charter should be as easy as booking a seat," said Nicolas Chemin, Passenger Charter Manager with Chapman-Freeborn.

Chapman-Freeborn made sales of around US$800 million in 2010, doubling from about US$400 million in 2006.

Overall, experts said Asia is now the rising market while demand in Europe and the US dries up.

As a result, jet management companies here are seeing a boom.

One of China's largest player, Deer Jet, has an estimated fleet size of around 30, up from about 12 jets just three years ago.

Francis said: "Because to be able to operate an aircraft you need to have certain number of personnel, you need to have chief engineer, chief pilot. For a businessman to go out and employ these kinds of people, it's a lot of effort to go through.

"We are talking about individuals who own aircraft, it's just that they get another company to manage the aircraft for them."

Going forward, experts said the maintenance, repair and overhaul (MRO) industry in Singapore will also benefit.

While the country might not have a large number of jet owners, it reportedly accounts for one quarter of Asia Pacific's commercial MRO work.

And with big players like Rolls-Royce and Fokker investing heavily in Singapore, experts expect the MRO business to grow strongly.

- CNA /ls

- wong chee tat :)