Minsheng International Jet’s 100 aircraft plan
In an interview from his new Beijing Airport office, Minsheng International Jet assistant president Shawn Wang talks to Corporate Jet Investor about his company’s ambitious 100 aircraft plan.
The Chinese proverb ‘Great oaks from little acorns grow’ is certainly true for the Minsheng group of companies, as the newly-formed Minsheng International Jet management arm has been handed down the task of managing 100 aircraft from its parent company.
Following the purchase in early 2013 of local operator CITIC, Minsheng created its Minsheng International Jet division to take on the task of managing the company’s fleet of aircraft and it’s from the company’s new offices, located a short distance away from Beijing’s Capital Airport, that assistant president Shawn Wang and brand director Annabell Gao talk to Corporate Jet Investor.
Walking through the building on the way to Wang’s second floor office it is clear that Minsheng has big plans. As well as inheriting a a small fleet of aircraft from the CITIC purchase, Minsheng also acquired the company’s offices, although Wang admits that this was too small for its intended operations. Minsheng quickly set about finding a bright and airy new office, one so airy that it is almost empty during our visit (although it is lunchtime, as Wang points out).
Wang, who joined Minsheng in 2013 after assisting with the set-up of Deer Jet’s Shanghai operation, is in his element in his new office, quickly skipping from answering questions, to talking through China’s business aviation challenges.
We talk first about the purchase of CITIC and the formation of Minsheng International Jet, which Wang explains was conceived to serve the owners of Minsheng financed aircraft who expected a better level of service from their aircraft managers. Although I point out to Wang that this is also a great way for Minsheng to protect its assets, he plays this down, simply re-stating that the company has been formed to offer good service to clients who already have a jet with Minsheng.
Five aircraft in one month
Wang tells us that there should be five aircraft deliveries this month, with one of them, a Dassault Falcon 7X, expected to arrive in Beijing the day of our visit.
As well as the new Falcon, the company is also expecting to take delivery of its first two Gulfstream G280s and two Embraer Lineage 1000s, with the target of managing 13 aircraft by end of the year.
That will certainly start to move the company closer towards its goal of managing 100 aircraft, but Wang admits that this will be done in a cautious step-by-step approach, with Minsheng firstly looking to change the attitude of the Chinese government towards business aviation.
Although business aviation does feature in one of the Government’s five year plan, progress has been slow – especially with opening up the country’s airspace, which is currently governed by the air force.
Access to slots at Beijing Capital Airport is one area that business jet operators have a major problem with, as only one slot an hour is available during peak hours.
Minsheng have an answer for this and has begun the process of building the country’s first general aviation airport in the Sanhe, Hebei province.
Located 60 km from central Beijing (the main Beijing Airport is 30 km from the center), the new Sanhe airport is a joint venture between Minsheng, Sanhe Municipal Government and Hebei Province Aviation Investment Holdings – and if all goes according to plan, construction should start later this year.
Once built, the majority of Beijing business aviation users would be encouraged to move across to the new airport, which will also include maintenance, repair and overhaul (MRO) facilities, which Wang says Minsheng might consider running in the future.
Overcoming China’s pilot shortage
The problem with Minsheng’s overall plan is the sheer size of it and this becomes evident a few days later when I run into Wang at the ABACE 2014 event in Shanghai during a Minsheng and Gulfstream press conference when an order for 60 Gulfstream jets was announced. This conference was then followed directly by the announcement of another large order placed by Minsheng, this time for 10 Challenger 350s from Bombardier, originally placed at the end of last year.
With so many aircraft already on the books – and with so many more to come – the major problem that Minsheng will face is the lack of suitable pilots. When I ask Wang about this he gives me an awkward smile and tells me that it is a great question.
The problem, Wang tells me, is that there is a general shortage of pilots in China and he is not allowed under Chinese law to approach pilots operating aircraft for other companies. Wang’s plan, therefore, is to hire foreign pilots, although he admits that this has been problematic in the past. Foreign captains, it seems, are more inclined to join airlines in China as the lifestyle is apparently better suited for non-Chinese pilots.
But again Minsheng might have a plan for this, as Wang tells me that in a few years time the company may start looking at starting a pilot training school.
Is China enough for Minsheng?
Leaving Minsheng’s Beijing operation center, you can’t help thinking that the company has thought about everything and you can’t help but be impressed with the breadth and scale of their plans.
But there still remains a niggling doubt that while Minsheng might have China covered, that could ultimately be its downfall.
China in the past has been somewhat unpredictable. Business aviation in the country is still in its infancy and while the government does have growth in its mind, it only takes one seemingly minor event for the government to have a change of heart and force a clamp down on private flying.
If that happens, it is hard to see how Minsheng can survive. With its massive exposure to business aviation in the country, the company would have to look elsewhere fast to offload its costly assets and while the industry would be able to absorb some of the aircraft quickly, it would be several years at least until all of the assets are disposed of.
Minsheng will have to look outside China to spread its risk and the recent appointment of Johnny Lau as head of aviation finance signifies that for Minsheng, China is not enough.