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It is easy to be optimistic about Asian business aviation.
Asia is the world’s biggest continent – with 4.4 billion people – but has just 1,155 business jets according to Asian Sky Group research. The US has more than 13,000 aircraft for 336 million inhabitants.
Whilst total population is less important, the global economy is also tilting towards Asia. The Huron Report says that China has 568 dollar billionaires compared with 535 in the US. Four of the Fortune Global Top 10 companies are Asian.
A new Asian generation are also learning about the advantages of business aircraft. There are signs that younger entrepreneurs are keen to own aircraft.
Bombardier forecasts that the region will need 1,100 new business jets over the next 10 years, Jetcraft says 789. These look conservative when you consider the number of customers but realistic when you look at the infrastructure issues the region already has.
Singapore this week hosted both the Asian Business Aviation Association (AsBAA) Annual General Meeting and the seventh Corporate Jet Investor Asia Conference. Attendees and speakers at both events highlighted the problems they already face everyday. But they were most concerned about the future.
“Slot constraints are stopping people from buying new aircraft”
“Slot constraints are stopping people from buying new aircraft,” said one Hong Kong operator and other airports in the region have similar problems.
Unlike North America, many large Asian cities have just one airport. Asian Sky Group says that Asia has 1,546 airports and just 61 FBOs. This compares to over 5,000 airports and 3,384 FBOs in the US.
Air traffic control systems in different countries already cause big issues. “Business jets cannot be used as true business tools if you have to wait 72 hours for overflight permits and then cannot get slots,” said a Philippine operator. Another operator added: “Thailand is an unfriendly place for foreign aircraft. You can come but if you do not have a hangar you cannot not stay.”
There is a shortage of staff. “MRO shops face a huge challenge attracting and retaining licensed staff in Asia,” said one Singapore maintenance manager. “The talent pool is only so big.” Asian Sky Group says that the region has 184 MRO shops compared with 3,384 in the US.
“It is almost as if aviation has had a lost generation”
Operators also said that finding good pilots is also getting harder. As in other markets, there are concerns that many of the people keeping aircraft flying are reaching the end of their careers. “There is an old work force,” said one consultant. “It is almost as if aviation has had a lost generation.”
The business jet fleet has grown rapidly over the last five years so you would expect growing pains like these. But the soft (staff) and hard infrastructure (airports and air traffic control) issues are largely because of the huge growth of commercial airlines in the region – particularly low-cost carriers.
The bad news is that this is expected to continue. The International Air Transport Association expects global air traffic to double in the next 20 years. Asian passengers are expected to account for more than half of this growth with China becoming the world’s biggest commercial aviation market in 2024. This works out at an extra 1.8 billion Asian passengers each year.
Some 78% of attendees at Corporate Jet Investor Asia are concerned that business aviation will face a shortage of airports within the next 10 years.
“We are facing a tsunami of airline passengers”
“We are facing a tsunami of airline passengers,” said one speaker. “We know that many airports are already full for business aviation and that very few airports worry about business jets compared to commercial ones.”
The good news is that people in the region have identified the issues and are trying to solve them. AsBAA is also fighting hard.
There are lots of reasons to be optimistic about the future of Asian business aviation. And one of them is that there are already lots of realists in the region.