CJI Asia: Exploring Asian dreams

opinion

by Alasdair Whyte

September 23, 2024

Our CJI Asia 2024 conference took place in Singapore.

The environment you are in can change your memory. A fisherman in a bar will often forget the exact weight of the fish they returned to the water. Golfers sitting in the 19th hole often have trouble recalling the exact number of strokes they took. People attending conferences or conventions tend to inflate quite how well their business is going.

To be fair, that did not happen at Corporate Jet Investor Asia (CJI Asia) last week. There was a lot of honesty both on and off stage. The region’s fleet has fallen since 2020 and as one leading operator said: “Business is really tough. No one can deny that.”

It is still a very competitive market. Some 75% of the more than 300 delegates at CJI Asia believed there are too many operators and that competition for aircraft is fierce.

When the Chinese business jet fleet grew rapidly between 2012 and 2019, many people in southeast Asia spent a lot of time saying that China is not Asia.

Unfortunately, it needed the Chinese business market to fall to prove this to some. It is worth remembering that China only fully reopened after Covid in January 2023 (it only stopped moving people with Covid into quarantine camps in December 2022).

The Chinese government did not stimulate the economy as much as the US or many European countries. When it did finally reopen, consumers did not rush to spend again, and the property market (which had been a big buyer of jets) was also already struggling. President Xi also started his Common Prosperity campaign in 2021. In a speech, he said: “The wealth gap and middle-class collapse have aggravated social divisions, political polarisation and populism, giving a profound lesson to the world.”

As one operator said: “A lot of customers believe that if you buy a jet you are pretty much asking to be investigated.” Several aircraft brokers and OEMs say there are signs that this is changing and new buyers are moving into the market.

Australia, one of the world’s most mature business aviation markets, has seen 10% growth since Covid, according to Jetcraft’s Daniel Renwick. With 230 jets, it represents some 20% of the Asian-Pacific fleet. Australia has historically been a pre-owned market, and Renwick says the fleet has modernised in the last few years.

“Post-Covid we saw a spike and there have been a lot of new aircraft come in and a real diversity of types,” said Darren McGoldrick of Luxaviation.

Southeast Asia has also seen significant growth and there was a lot of excitement about India. Japan is also seeing more demand.

Among the things that make business aviation so exciting are the regional differences. Operators say that few customers are asking about the environment or for sustainable aviation fuel (SAF). A manager at one large operator was asked to contact customers to see if they are interested in using SAF. “I just spoke to one of the region’s largest coal exporters to ask if he is interested,” he said. “They weren’t.”

In the long term, people are still upbeat about the market. Some 74% were fairly optimistic, with the rest very optimistic at our CJI Asia conference.

To be fair, it is a self-selecting audience. If you do not believe this you should probably work in a different industry.