Business consultancy Frost & Sullivan says Malaysia could be regional business-aviation hub


Frost & Sullivan, the market research and consultancy company, says that Kuala Lumpur could become a regional business aviation hub.

For the report the company surveyed interested stakeholders in Asia Pacific, with Kuala Lumpur’s Subang Airport being the favoured location for a regional business-aviation hub in the region.

Subang Airport is the closest to the city centre. As well as being the home to the air force’s VIP transport division, the airport hosts a small number of domestic and regional scheduled flights. It handles the majority of business aviation movements for Kuala Lumpur, with ExecuJet and Hawker Pacific running FBOs and maintenance facilities at the airport.

According to the report, Subang currently handles around 3,200 business-jet movements per year, fewer than neighbouring Singapore, but more than in Bangkok.

Frost & Sullivan believes that Subang could handle up to 9,299 movements per year by 2030.

“However, the industry has several roadblocks that need to be mitigated in order to realize the full potential. Regulatory issues related to registration, financing and cabotage policy are major roadblocks. For instance, only 30% of the fleet based out of Malaysia are registered in the Malaysian registry. The others are registered in other countries. This hampers the domestic charter industry as the internationally registered jets cannot be used for domestic operations. Other hurdles are in the form of infrastructure related issues and operational issues”, said Nishant Dey Purkayastha, consultant at Frost & Sullivan.

Malaysia is in the process of transforming itself from an economy driven by labour-intensive industries towards one driven by high-tech industries. Under a series of three 10-year year plans introduced in 1991, Vision 2020 aims to push Malaysia towards developed nation status by 2020.

Malaysians went to the polls in May, with the then opposition party scoring a historic victory that saw the Barisan Nasional coalition (BN) lose power for the first time in 60 years.

The new prime minster, 92-year old Mahathir Mohamad had been a key figure in BN until he left in 2016, saying at the time that he didn’t want to be associated with a party that many Malaysians saw as supporting corruption.

Outgoing prime minster Najib Razak is currently involved in a corruption scandal and is accused of taking home $700m from the state-owned investment fund 1Malaysian Development Berhad. Razak denies the allegations.

According to AMSTAT data, Malaysia’s business jet fleet grew 9.3% between 2013 and 2017. At the start of the period, it grew in double digits for both 2013 and 2014, although in later years the growth slowed, finally declining by 4.1% in 2017.

Over half of the fleet, 68.1%, is made up of heavy jets, with Bombardier having the largest percentage of these with 34.4%. Gulfstream has the second-largest percent with exactly 25%. Bombardier’s Global family are the most popular in the heavy-jet category, with three each of the 5000 and 6000 operating in the country. There are also three Gulfstream G650 / G650ERs operating in Malaysia.

All the larger business aircraft in the fleet are operated either by the government or the air force, and include an Airbus A319CJ, Airbus A320CJ and a Boeing BBJ1.

Smaller aircraft in the government/air force fleet include a Falcon 900 and Global Express.

Fleet growth has not mirrored GDP growth in the country. In broad terms the economy has grown between 4.2 to 6% over the five-year period between 2013 and 2017.

Corporate Jet Investor ran its own survey amongst Asian business aviation professionals in April 2018, with Malaysia placing high on the list as a friendly place for business aviation activities.

Topping the list in all four categories, including which countries regulator understands business aviation the best, was Singapore. The main airport that handles business aviation in Singapore, Seletar Airport, topped the list as the most business aviation-friendly airport.

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