On The Fly

On the fly

Business aviation in Asia 2015

With the Asian Business Aviation Conference and Exhibition (ABACE) landing in Shanghai from April 14th to 16th, Rod Simpson takes a look at the Asian market and gives us a sneak peek to the show.

The 2015 edition of the event is set to feature more than 185 exhibitors, a static display of nearly 40 aircraft and more than 8,000 visitors from the Asian region. The show will also incorporate valuable sessions on such topics as business aviation safety issues and requirements for owning, operating and maintaining a business aircraft within the region. 

Of course the increasing interest in ABACE is a result of the fact that Asia’s influence on business aviation continues at a breakneck speed – with the international business community taking its aircraft to the growing economies of such countries as China, India and Malaysia. Also, increasing numbers of business aircraft are being sold into Asian countries for travel within the region. This trend is not only driven by international corporations, but also by the rapid rise in the number of high-net-worth individuals. 

Also read: Guide to flight ops into Shanghai for ABACE 2015

According to the recent Wealth Report 2015, prepared by International property specialists Knight Frank, the Far East will overtake Europe in terms of its billionaire population over the next ten years. The number of billionaires in China alone in 2023 is expected to exceed the combined total of these individuals in the UK, Russia, France and Switzerland – not to mention that the population of ultra-high net worth individuals in Hong Kong is expected to grow by 37% to 3,500 by 2023.

State of the fleet

Looking at the aircraft fleet within the region, last year nearly 200 business jets and turboprops were delivered to Asia, according to statistics from GAMA (the General Aviation Manufacturers Association). The dynamism being experienced in the region is borne out by research from the Hong Kong based Asian Sky Group, whose overview of  the business aviation position in Greater China reveals that, between 2007 and 2013, the business jet fleet grew at a compound annual growth rate of 34%. 

In terms of makes and models, Gulfstreams have a dominant position in the market, and there are significant fleets of business jets with the large charter operators such as Deer Jet. The use of helicopters has also expanded rapidly, and Asian Sky’s latest survey shows that at the end of 2014 there were 2,463 helicopters in operation. Of these, 800 are operating in Japan and 563 were in mainland China – up by 34% over the previous year. Most helicopters in the Asian market are for multi-mission and offshore support, but 19% of the fleet is in the corporate, private and charter sector.

Read also: It's show time!

Asia remains a magnet for western businesses whose trade with China and other Asian countries continues to grow.  Richard Koe of aviation research specialists WingX Advance explains that, based on tracking data for Asia compiled by his firm, there were 6,500 business jet movements between North America and Europe and Asian destinations. This represents an increase of 5% to 10% over 2013.  

Koe’s statistics also show some interesting trends. For instance, uplifts of fuel by business aircraft at Singapore’s Changi Airport increased by 55% compared with 2013, and Macao saw a 78% rise in business jet departures. Despite Chinese government cutbacks in the use of chartered business jets by government officials, significant increases in traffic were also to be found at such Chinese destinations as  Hongqiao, which saw traffic growth of 56%, Xiaoshan, which serves Hangzhou, the capital of Zhejiang Province in the Yangtze River Delta (up 127%), and at Ürümqi’s Diwopu in northwestern China (30%). 

Challenges ahead

Business aviation in Asia is represented by AsBAA. While welcoming the rapid growth in activity, the association also highlights the unsurprising truth that capacity of airways and airports is a major issue in the development of the industry and demand for services is lagging behind facilities. Commercial traffic is making the airways increasingly crowded, and there are growing demands for equipment upgrades at airports and on business aircraft. In China, restrictions due to military airspace are gradually being eased, but frequent changes in rules means operators must constantly review their trip planning. 

Also read: New joint venture puts focus on wider Asia region

Aircraft parking and hangarage is still a major issue at many airports, such as Hong Kong International and Shanghai Hongqiao. “There is limited infrastructure, lack of qualified manpower and outdated and/or inappropriate regulation throughout the region, which stifles growth, impacts negatively on cost and strikes against the core value of business jet ownership,” says Hongkong Jet’s Denzil While. “The key to unlocking these issues lies with lobbying and educating government on the value that business jets can bring to the community.”

Nevertheless, the problem is recognized by national authorities, and China’s CAAC plans to expand the number of civil airports from 193 to 244 by 2020. 

Considerable investment 

Considerable private investment in facilities is evident across the region. In Singapore, the government has actively encouraged the development of the Aerospace Park at Seletar Airport, where the runway has been extended to 6,023 ft. (1,836m), an ILS has been installed and more aircraft parking stands have been provided. Business aviation users are being attracted to Seletar by major MRO expansion projects, including Jet Aviation’s new 54,000 sq.ft. hangar and a 75,000 sq.ft Aviation Centre opened in February last year by ST Aerospace. 

Elsewhere, Jetex Flight Support has set up a new handling facility at Ninoy Aquino International Airport in Manila to give a full range of services to private jet operators, and in Indonesia Execujet has taken another step in its management of a string of business airport facilities by opening a new FBO at Bali International Airport. 

With all this development, it is clear that considerable effort is taking place in the Asian region to resolve capacity issues and embrace further expansion of business aviation activity.

By Rod Simpson

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