Strong bizav results expected from APAC

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FINANCE / ASIA / FRIDAY FIVE | 10/04/2017

The Asia-Pacific market continues to show signs of business aviation growth, and we are tracking promising activity throughout the region. Jetcraft’s 10-year market forecast predicts Asia-Pacific will remain one of the most active of the emerging markets (and the third-largest business aviation market behind North America and Europe), accounting for 10% of unit deliveries – equalling 798 units – from 2016-2025. As we closed 2016, Asia-Pacific accounted for approximately 20% of our results, on par with Europe.

Must-read: APAC – a long-term view for growth

One of the key drivers for Asia-Pacific’s business aviation sales activity, from our perspective, is a greater acceptance of pre-owned aircraft among buyers as well as an increase in the number of first-time sellers in the market. It remains a region where buyers are inclined to purchase new aircraft, but there is a significant shift in attitude, where buyers are acquiring pre-owned aircraft in greater numbers and with growing confidence. The value proposition of the pre-owned aircraft is better understood in what is still a maturing market.

Countries currently fueling business aviation growth in the region are Australia, Indonesia, the Philippines and Malaysia. Naturally, given the geographic positioning of the Asia-Pacific countries, the challenges of getting to many destinations via commercial flights and the distances between cities tends to require the need for long-range business aircraft.

There are a lot of new aircraft models coming to the market between now and 2020. I don’t think there has been a period of so many completely new types being released in such a short period of time in the history of this business. This will encourage aircraft owners to upgrade to the newest models and sell their existing aircraft to a new owner. We see this as a great opportunity to boost activity in the region.

Never discount China

Don’t let some of the more commonly held business aviation market misconceptions mislead you. China’s economic growth is continuing, just not at the dizzying (some might say unsustainable) rates of the recent past. The biggest constraints remain the infrastructure and the regulatory environment, which sadly hinders business aviation and a more natural growth in the region. Airports are becoming congested and, while there are construction plans for 50+ new airports, it is going to take time to show any real relief and probably will always be behind the real needs.

But, headway is being made, and we continue to see transactions from Chinese buyers and sellers. In greater China (Hong Kong, Macau, Taiwan) we began to see a wave of first-time sellers upgrading to new aircraft types.

Global economic factors will play critical role

Global economic stresses and uncertainties will always impact the business aviation industry. The downturn of commodity prices certainly does not help, as many countries have grown out of feeding the boom years. But the economies in the region are changing and we are positive about the future.

Next month, these and other issues may very well be discussed in more depth when the business aviation industry will once again convene in Shanghai for the Asian Business Aviation Conference and Exhibition (ABACE). However these issues play out, we remain optimistic about the current state of business aviation activity in Asia.

This article was originally published on Jetstream, a Jetcraft blog.

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