A Possible Recovery of the APAC Business Jet Market

Jeffrey C Lowe, Managing Director of the Asian Sky Group makes comments on the APC Business Jet market.

He says, Oh, what a difference a quarter makes as hope grows and a recovery from Covid-19 starts to take hold in the aviation industry.

In China, the commercial airlines flew 26M passengers in May, down only 53% y-o-y; still a 16% improvement from April. Some projections even see a full recovery to pre-Covid-19 levels by the end of August and “possibly even see a slightly positive y-o-y growth”.

The Asia-Pacific region did not fare as well as the huge domestic China market, but was only 43% down in June versus 2019, with projections of just 12% down in August.

For business aviation, likewise, improvements took hold in Q2 of 2020, with China the busiest business aviation market with 280 domestic flights. The Asia-Pacific region as a whole saw business jet flight activity stop its decline and the curve flatten but flights of five hours or more saw the biggest increase as Europe and the United States reopened.

These positive trends were reflected in our survey with optimism significantly bouncing back in the Q2: overall optimism was up 8%, with China registering a whopping 20% improvement.

But people’s intentions in the end are still tempered as recent events have demonstrated the fragility of any recovery, with an outbreak in Beijing in June and as we here in Hong Kong experience a “third wave”.

So, despite renewed optimism, the percentage of the “I’m not sure” respondents grew 10% in Q2 to 59% – almost 2/3rds. And with this growing uncertainty, the higher percentage of the fleet for sale, due to the drastic economic impacts of Covid-19, sits unsold longer, with Seller’s having few options but to eventually lower prices.

Thus, this is the current state of affairs, but by no means where we will end up.

To help you see your own way forward, as always, we here at Asian Sky Group have strived to provide you with relevant commentary, special features & market updates.

Enclosed in the Q2 issue of Asian Sky Quarterly you’ll find commentary by Gordon Gardiner and James Jordan of HFW on the Recovery of Business Aviation, a market update on the global business jet fleet – including OEM backlogs by Global Jet Capital, an update on pre-owned transactions on a worldwide scale by AMSTAT, Q2 Asia-Pacific flight activity courtesy of WINGX, a look at the flexibility and efficiency of the Bell 505, and analysis of the Bell 412 pre-owned market. Lastly, we hear from AsBAA Chairman Wu Zhendong in our foreword, discussing the importance of regulators and associations during such periods of uncertainty.