China leads Asia- Pacific fleet growth
If there is one measure of the rude health of the business jet industry, it must surely be the sheer numbers of people attending ABACE, the region’s most important exhibition today. They have not been deterred by the weather and, when the sun finally made its appearance in Shanghai this morning, the temperature was just about bearable for visitors to the ABACE show.
That so many people are in attendance should be taken as a highly-positive sign. The Asian Sky Group’s annual fleet report, published today, and the ABACE market updates session were both very positive about the Chinese market.
Yes, China’s headline-making days of double-digit annual economic growth might be a distant memory, Beijing’s anti-graft measures may well be weighing on conspicuous consumption, and the expected increase in infrastructure needed to support business aviation operations may well have slowed down. But the Chinese government’s economic planners plainly see the benefits that general aviation could bring to the country, and the subject of general aviation was specifically mentioned in the 13th Five-Year Plan, introduced in 2016.
Although the definition of general aviation (GA) is broad and more commonly refers to smaller aircraft, the plans to further open the country for general aviation also affect business aviation.
The Five-Year Plan explicitly speaks of the need to further develop the infrastructure needed to support GA, as well as the need to open up more low-level airspace.
These measures brought with them a renewed sense of optimism in the Chinese market. Charter companies began to see an increase in requests, aircraft began to be used more often and an increasing number of pre-owned aircraft began to enter the region.
All of this helped the Chinese mainland fleet grow by 8.7% in 2017, more than double its 4.3% growth rate in 2016.
Alongside the Chinese mainland, Greater China combined — including Hong Kong, Macau and Taiwan — also saw an increase in fleet numbers during 2017, with a continued decline in Macau offset by gains in Hong Kong and Taiwan.
Hong Kong also has issues that constrain its fleet’s growth, although these are largely attributed to a lack of available parking slots. Last year’s 7.8% growth is higher than the 4.8% in 2016 and is presumably good news for Shenzhen, Guangzhou and Zhuhai, which are all close enough to Hong Kong to be used as overspill airports to park aircraft.
Elsewhere in Asia the picture was less bright.
Overall, the Asia-Pacific fleet grew by just 2.6% in 2017, a touch lower than the 3.0% growth recorded in 2016. Almost all of the rest of Asia-Pacific – beyond China — saw either a decline in fleet numbers or remained flat, with only Australia, India and Malaysia seeing more aircraft enter their fleets.
The sharpest declines were in Singapore, which lost 20% of its fleet, and Indonesia which lost 10%.
Asian Sky Group’s managing director Jeff Lowe says that he is seeing renewed optimism in the region. This contrasts with the market survey results that the company published in its most recent Asian Sky Group Quarterly magazine, where most respondents expressed caution.
Lowe believes this is a blip, believing the results of the survey are “perceived (hoped) as just a momentary pause – a collective catching of our breaths if you will – at the start of a new year before we all go roaring off into the remainder of 2018.”
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