Jetcraft says Asia is no longer an ‘also ran’ market


David Dixon, the president of Jetcraft Asia, has been in the region for a long time.

The Asia that Dixon moved to in the 1980s was a vastly different region, both politically and from a business perspective. When he first arrived, the business aviation market itself was very much in its infancy, with very few aircraft in the region.

As the president of Jetcraft Asia, he saw the beginning of the “gold rush” of the early 2000s, when charter companies sprang up, all competing for an expanding slice of the charter market. But he has also seen the downside, especially in China with the introduction of the government’s anti-austerity measures which cut off charter revenues almost overnight.

In the past 12 months, he has witnessed a change, most noticeably in the mindset of Chinese buyers who have begun to accept that pre-owned aircraft offer excellent value for money.

“The market for Jetcraft (in Asia) has changed. It used to be a hard to sell pre-owned aircraft, but now we are in with a good chance where it is almost even Stevens” he says.

Part of this reason, says Dixon, is that Chinese buyers have come to realise that a five-year-old aircraft isn’t really that old. And he backs this up by saying that even some of the best airlines in the region are still flying 20-year old Boeing 777s on commercial flights.

The acceptance of pre-owned aircraft ties in neatly with the replacement cycle of business jets in the region.

According to Asian Sky Group data, the Gulfstream G450 and G550 and Bombardier Global 6000 are amongst the most popular types in Asia. The replacement aircraft for them, the Gulfstream G500, G600 and Global 7000. are all due to gain certification and begin their deliveries later in 2018. And, Dixon says, he has seen a trend, mostly in China, for owners looking to sell their existing models and move up to their replacement.

Because of this upgrading, first-time Asian buyers have turned into first-time sellers, a move that creates a new market for Europe and the US to hoover up pre-owned aircraft. Although in the past buyers outside the region have shied away from Asia-owned aircraft, Jetcraft says that it has seen a reversal of the previous trend and that European and US buyers are now actively looking for pre-owned aircraft to take out of the region.

The increase in activity that Dixon has seen has been mirrored across the region by other brokers, manufacturers and charter operators.

Part of this is due to the changing attitudes of the Chinese government which, in its 13th Five-Year Plan introduced in 2016, identified general aviation as a focus area for growth. Although the definition of general aviation is broad, the government’s pledge to build airports and infrastructure to support could help with the growth of business aviation in China.

Infrastructure remains one of the largest barriers to growth in the region. Across Asia, airports from Bangkok to Manila are already at saturation point from commercial flights that they have begun squeezing out private-jet flights. Airports in China are especially full and discourage the use of business aviation in favour of airline flights. Shanghai’s Hongqiao Airport, one of the busiest airports for business jet flights in China, and where we meet Dixon, only gives one slot per hour for private jets.

Dixon has a solution for this in China, although he concedes that it could be controversial. His idea is dual-usage airports, where private-jet flights share the airport with the military.

“There are dual-use airports across North America and Europe, which are shared with the military. That’s fairly rare here, there are exceptions, and it would be great if that could be grown because they wouldn’t have to spend lots of money on the airports because they are already there”