Nextant focuses on new deals in Asia
Nextant has said Asia has the lowest penetration of business jets among the super rich in the world, and with the number of billionaires set to double in the next ten years, the manufacturer is focusing on signing deals with China Great Wall Industrial Corporation and Jet Aviation Singapore.
The entry-level business jet market in Asia has grown rapidly over the last decade with the five years to 2012, seeing a 74% increase in deliveries on the previous five year period (2003-2007). Globally, deliveries of business jets grew by just 6% between the same two period.
In spite of this recent growth, the business aviation market in Asia remains relatively underdeveloped compared to the rest of the world and is likely to continue to grow as its economies and high net worth populations continue to expand. It is for these reasons that Asia has been identified as a core part of Nextant’s expansion strategy.
Nextant estimates that there is currently one business jet for every 121 individuals with net assets of at least $30million in Asia, compared to one for every eight in the USA and Latin America. In Europe, which has the second lowest density of business jets, there is one jet to every 33 persons with $30million or more; still far higher than in Asia.
China is the world’s second largest economy and while expansion has slowed, it recently announced its economic growth target for 2013 is 7.5%; far higher than many economies, and according to a recent report by the OECD, it is on course to overtake the US as world’s largest economy by 2016. This increase in economic activity is likely to increase demand for business aircraft as the number of large companies in the region grows.
The number of super-rich in Asia is also growing rapidly and this is also likely to fuel demand for business jets. According to Knight Frank’s recent Wealth Report 2013, the number of billionaires grew by 9% between 2011 and 2012 and is expected to more than double by 2022 (119%). In China alone, the number is expected to grow by 214% over the same period. Similarly, the number of people in Asia with net assets of $30million or more is also predicted to grow by 88% in the next 10 years, making it the fastest growing region along with Latin America.
Nextant, which entered the Asian market in August 2012, has identified it as one of its key territories and is building its presence in the region to ensure it is in the best possible position to take advantage of the growth opportunities it presents. At ABACE in Shanghai, it announced the appointment of the China Great Wall Industrial Corporation (CGWIC) as its exclusive sales agent for China and an agreement with Jet Aviation Singapore to provide maintenance services for its fleet.
Sean McGeough, president of Nextant Aerospace, said: “The penetration of business jets among the very wealthy in Asia has to now been far lower than any other region. This is a balance we expect to be redressed as attitudes towards business travel develop and economies in the region continue to grow. We believe the timing is right with our 400XT light jet for both value-oriented customers and those looking for a regional complement to their larger aircraft.”
“In the Nextant 400XT, we have a uniquely innovative and cost-effective product which is challenging the way buyers think about aircraft purchases. We’ve been actively selling our jets in Asia for less than a year but the response has already been fantastic and we are attracting a lot of interest from businesses, individuals and governments in the region. There is a huge opportunity here and, as our deals with CGWIC and Jet Aviation Singapore testify, we mean business.”
The Nextant 400XT has a 2,003 nautical mile (3,709 km) range, which means customers can fly from Singapore to as far west as Mumbai, India, or as far north as Shanghai, China without needing a refueling stop.
The aircraft sells for roughly half the price of its competitors with significantly lower operating costs. Low maintenance costs are backed by a full factory warranty, a global network of owned and authorized service centers and the world’s largest inventory of rotable parts for BE40 series aircraft which includes the 400XT.
Globally, the Nextant Aerospace value proposition has proven hugely attractive, securing sales of over $100 million since late 2011. Nextant currently has a sales backlog valued in excess of $175 million.