Private Aviation In China: Not So Fast | Aero-News Network
Aero-News Network
RSS icon RSS feed
podcast icon MP3 podcast
Subscribe Aero-News e-mail Newsletter Subscribe

Airborne Unlimited -- Most Recent Daily Episodes

Episode Date

Airborne-Monday

Airborne-Tuesday

Airborne-Wednesday Airborne-Thursday

Airborne-Friday

Airborne On YouTube

Airborne-Unlimited-10.28.24

Airborne-NextGen-10.29.24

Airborne-Unlimited-10.30.24

Airborne-Unlimited-10.24.24

Airborne-Unlimited-10.25.24

Fri, Apr 05, 2013

Private Aviation In China: Not So Fast

Analyst Brian Foley Sees A Market That Will Grow, But Slowly

China has been hailed as the next great market frontier for private general aviation aircraft. Indeed, during the worldwide recession the country snapped up expensive, high-end business jets at an unprecedented rate, providing a rare glimmer in an otherwise flagging industry.  “Some interpreted this as the beginning of a sales explosion and the time to get in on the action at any cost,” notes aviation market researcher Brian Foley (pictured). “While that didn’t last, a more sustainable market should come but will take more patience.”

The initial sales boom was a bit of an anomaly, a product of sudden, new-found wealth in the region. Since then the local stock market declined, economic growth moderated and assorted “bubbles” ensued, causing the early private aircraft buying enthusiasm to wear off proportionately.  In addition there are a number of restrictions and inflexibility when operating private aircraft in China which constrain its full sales potential. Foley illustrates this with an automobile analogy.

“Imagine if there was a 22% tariff on imported cars, drivers had to ask permission to drive 2 days in advance and could only drive to specified cities via a sub-optimal route with few services. Driving to a city not on the approved list would require a “navigator” to ride along. It’s safe to say you wouldn’t sell many cars, but that’s exactly how the aircraft operational environment is in China today, which isn’t great for selling planes either.”

With development of general aviation a national objective, both the government and private Chinese companies have made a number of aerospace acquisitions and joint ventures in the last couple of years. “A clear, unified, strategic approach hasn’t really emerged yet, and some deals seemed to have unnecessarily favored the seller.  As familiarity with the segment increases, one would expect to see more systematic, logical, pragmatic and deliberate actions commensurate with building an aviation industry.” 

According to AMSTAT there are just 176 business jets based in mainland China, and another 118 in Hong Kong. Combined that’s 294 or only 1.5% of the 19,373 business jets in operation worldwide. While the Chinese fleet is expected to have a phenomenal growth rate, it will be from a very small base. 

Despite its market limitations, over the next decade China will be a nice adjunct to the overall market and account for as many as 900 or 9% of future worldwide business jet deliveries.  This is analogous to the emerging fractional ownership concept back in the 1990’s which provided both an unanticipated and welcome extra boost to sales. “I view this next decade a period when the market congeals and some of these impediments slowly get addressed. This could set up the following decade to be truly extraordinary.”

FMI: www.brifo.com

Advertisement

More News

Senator Pushes FAA to Accelerate Rocket Launch Licensing

States That Current Process is Damaging National Aerospace Development US Senator Jerry Morgan is pushing the FAA to speed up the process for rocket launch licensing. He argues tha>[...]

Classic Aero-TV: RJ Gritter - Part of Aviation’s Bright New Future

From 2015 (YouTube Edition): Model Aviator Aims For Full-Scale Career While at the 2015 Indoor Electric RC Festival, referred to as eFest, ANN CEO and Editor-In-Chief, Jim Campbell>[...]

Aero-FAQ: Dave Juwel's Aviation Marketing Stories -- ITBOA BNITBOB

Dave Juwel's Aviation Marketing Stories ITBOA BNITBOB ... what does that mean? It's not gibberish, it's a lengthy acronym for "In The Business Of Aviation ... But Not In The Busine>[...]

ANN's Daily Aero-Linx (10.27.24)

Aero Linx: Cardinal Flyers Online The Cardinal Flyers Online Web site was created and is maintained by me, Keith Peterson. My wife Debbie and I have owned a 1976 RG since 1985. Wit>[...]

ANN's Daily Aero-Term (10.27.24): Clearance Void If Not Off By (Time)

Clearance Void If Not Off By (Time) Used by ATC to advise an aircraft that the departure release is automatically canceled if takeoff is not made prior to a specified time. The exp>[...]

blog comments powered by Disqus



Advertisement

Advertisement

Podcasts

Advertisement

© 2007 - 2024 Web Development & Design by Pauli Systems, LC