Fri, Jul 30, 2004 page12

• Business jet makers start sizing up Chinese market

  HIGH FLYERS WANTED As Beijing begins to ease airport restrictions and China's economy continues to expand, more people will be able to afford their own aircraft

  • REUTERS
  • • 
    • 
    • 

  China's growing billionaire club is attracting makers of champagne- and caviar-stocked private jets, but regulations and other barriers to entry are keeping the potentially lucrative business grounded.

  Lack of airport infrastructure, high landing fees set by the government, restrictive military control of much of China's airspace and policies that hinder individuals and companies from operating private jets are just some of the obstacles.

  But some of the restrictions are slowly being eased and private estimates put China's business jet market at over US$9 billion within 10 years, with the number of jets expected to rise from a couple of dozen to over 600.

  "There are more private jets in the greater Los Angeles area than in the whole of China at the moment but we expect it to be fast-growing," said David Dixon, Asia Pacific vice president for regional jet maker Bombardier Aerospace.

  Canada's Bombardier is vying with traditional rival Embraer SA of Brazil and Gulfstream, a unit of General Dynamics, for a slice of the private jet market in China -- where the economy is growing at nearly 10 percent.

  While still small, the number of Chinese able to afford the millions of dollars for their own aircraft is growing.

  "As soon as regulations are relaxed, you will see numbers double every year," said Jim Eckes, managing director of consultant IndoSwiss Aviation.

  The minimum worth required to make Forbes' list of China's 100 richest people rose to US$100 million last year from US$6 million in 1999, when the US magazine first published the list.

  "If you have that much money you can support a used corporate jet very nicely," Eckes said.

  But the US$22 billion combined wealth of China's rich list pales in comparison to the US -- where the net worth of the Forbes 400 list totals US$955 billion.

  At a recent Asian business aviation exhibition and conference in Hong Kong, the first organized by a US industry group, a Bombardier salesman said he spotted only one genuine buyer checking out four jets parked on the runway apron.

  Next year, the show heads to Shanghai hoping for better turnout and orders from firms, such as Broad Air Conditioning, which need executive access to their sprawling markets.

  Based in Changsha, Hunan Province, Broad Air Conditioning is one of very few Chinese companies to own an aircraft -- a Cessna made by US firm Textron Inc.

  Embraer would not comment on sales but a South American business publication reported the plane maker closed the sale in China of a 13-seat jet for US$21.5 million in May.

  The name of the buyer was not disclosed.

  Analysts say opulent first-class cabins offered by Asian airlines such as Cathay Pacific Airways and Singapore Airlines, which put more emphasis than US carriers on service, may limit the allure of private planes.

  And charter jet operators are also clamoring for a share. Air China began operating charters last year with one Gulfstream aircraft. Shandong Airlines and Hainan Airlines also now offer business jet services.

  Hong Kong-based Metrojet, owned by the Kadoorie family that runs the city's landmark Peninsula Hotel, has seen a 20 percent increase in the number of charter flight reservations in the past 18 months and will soon take delivery of a new Gulfstream jet.

  Still, private jet makers will have the right colors to go with their China-bound jets when the time is right.

  Aircraft interior designer B/E Aerospace Inc has designed an Asian-themed plane interior with green and raspberry tones, rather than the usual shades of beige.

  "It's both a design theme and to appeal to Asia customers," said Michelle Stone, the company's marketing director.

  Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.
• Most Popular

  • 1

    German warships to pass through Strait

  • 2

    Sino-Russian air patrol designed to counter US

  • 3

    Court orders Ko Wen-je’s detention

  • 4

    Silicon photonics alliance formed

  • 5

    Ko Wen-je release quashed