When a Chinese customer asked for the interior of his new Bombardier Challenger 850 jet to be covered with pricey black carbon fiber, the designer was shocked — but happy to oblige.
“We’ll do whatever you want, as long as it’s within the realm of certification,” said Sean Gillespie, executive vice president for sales of Flying Colors, a North American aviation services firm.
“But carbon fiber, we’ve used it before, but usually it’s used as a trim,” he said.
Photo: AFP
The market for private jets — sometimes called business or executive jets — is a small but fast growing aviation segment in China, where rapid economic development has created a surge of new wealth.
The first US Gulfstreams only arrived in the country in 2003, but a decade later there were 248 business jets in China, a 28 percent leap from 2012’s figure, consultancy Asian Sky Group said.
Customers include Jack Ma (馬雲) of e-commerce giant Alibaba (阿里巴巴), in the process of a multibillion-dollar share offer in the US, and Wang Jianlin (王健林) of Dalian Wanda Group (萬達集團), which bought the US cinema chain AMC.
Photo: AFP
“Buyers can be in their 20s, in their 70s. They can be in real estate, investment, oil and gas. They are from all over China,” said Jason Liao, head of consultancy China Business Aviation Group.
“There is no typical Chinese buyer,” he said.
One thing they have in common: tens of millions of US dollars available to buy their own planes. European firm Airbus has just started offering an US$80 million budget version of its corporate jet in China, with a pre-designed cabin instead of a fully-customized one.
They can be swayed by the little details. So Gulfstream has a place for a rice cooker on board, Brazil’s Embraer can sync an iPad to adjust lights and climate control, and Airbus offers a round table for playing mahjong.
Chinese billionaires’ most common destinations are nearby Asian cities such as Hong Kong, Macau and Singapore for gambling and entertainment, but they nonetheless prefer “long range, big cabin” aircraft with the ability to cross the Pacific and bring North America within reach, Airbus and Ledbury Research said in a report.
Even so, manufacturers are quick to promote planes as a business tool, rather than a toy of the rich.
There are some dark clouds on the horizon for the market: more moderate economic growth and limits on flight paths since most of China’s airspace is controlled by the military, along with a lack of infrastructure for private planes.
China has just 286 landing sites suitable for these types of aircraft, state media say.
“There are some challenges with airspace, with airport take-off and landing restrictions,” said Scott Neal, senior vice president for sales and marketing at Gulfstream.
At the moment, potential buyers are also eager to keep a low profile amid an ongoing government austerity campaign and anti-corruption drive launched after Chinese President Xi Jinping (習近平) took over as head of the Chinese Communist Party at the end of 2012.
“If you back up two years ago, this market was really happening very fast and was kind of electric,” Boeing Business Jets president Stephen Taylor said.
“It definitely has been less aggressive and a more subdued market ever since the new administration came in and started pushing against some of the luxury items,” he said.
Asian Sky’s general manager Jeffrey Lowe added: “Maybe not getting into the biggest and flashiest airplane is certainly the best approach these days.”
However, he said, “other than that, they still have a definite need for the aircraft and most of them are finding ways to buy.”
At a recent air show in Shanghai a middle-aged man sat near a Gulfstream display, but declined to give his name and attributed his presence to his tall companion, introducing her as a fashion designer.
“I only came along because my girlfriend wanted to look at planes,” he said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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