09/02/2010
According to Frost & Sullivan, the increasing population of high net worth individuals (HNWIs) and improving government regulations are slowly but surely making their mark on the business aviation market.
As a result of these trends, a greater adoption rate of private business jets can be seen in Asia Pacific. There is significant latent potential in the market for original equipment manufacturers (OEMs) to form strategic partnerships with local participants to ensure local presence and reduced turnaround times.
The Asia Pacific market for fixed base operators (FBOs) is set to witness stable growth in the maintenance and ground handling segments as service providers prepare to tap the potential from VIP completions in the future.
New analysis from Frost & Sullivan , Asia Pacific FBO Market Assessment, finds that the market (excluding VIP completions) was worth $43.7 million in 2008 and estimates this to reach $74.23 million by 2018.
"With a current market potential of over $45 million and an expected surge in potential by 70 per cent through 2018, the future of the Asia Pacific's FBO market is expected to remain on the 'growth track'," notes Frost & Sullivan Research Analyst Gautam Ratan Kanal. "The growth rests largely on the sustained growth of business aviation in Hong Kong and Singapore and the adoption of the business aviation model by China. Going forward, business aviation is likely to become a norm for large corporates and HNWIs, hence, early adoption will enhance the overall market potential."
The Asia Pacific FBO market is all set to gain momentum, fuelled primarily by Singapore and Hong Kong. However, government regulations, coupled with import regulations and the lack of skilled labour, are dampening the market prospects.
Business aviation is gradually growing in the region. As increased aircraft movements lead to congestion at airports, the need for business jet travel is set to soar.
However, one of the major challenges lies in mobilising technically sound labour. Another challenge pertains to motivating the local market participants to enter into tie-ups with business jet OEMs.
"It is vital for existing service providers to understand that as a result of the global economic slowdown, overall spending patterns have been affected," remarks Kanal. "Hence institutions that earlier encouraged private jet financing are momentarily on the retreat, even as large scale expansion of services needs to be carried out with greater care."
Greater acceptance of the business jet operational model in the region and the emergence of Chinese aviation will ensure that the FBO market functions smoothly and grows amidst competition.
"Local market participants need to closely work with OEMs and operators from Europe and North America in order to be authorised to carry out services which will provide them with greater opportunities," advises Kanal. "This approach will also aid in expanding their customer base as a result of being certified to carry out maintenance for various types of jets."
A greater adoption rate of private business jets can be seen in Asia Pacific