Asia-Pacific Business Jet Charter Report 2018
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ASIA-PACIFIC BUSINESS JET CHARTER REPORT 2018 SUMMER 2018 CHARTER REPORT | I Beijing Shanghai Shenzhen Hong Kong Singapore ABOUT ASIAN SKY GROUP ASIAN SKY GROUP (ASG), headquartered in Hong Kong with offices throughout Asia, has assembled the most experienced aviation team in the Asia-Pacific region to provide a wide range of independent services for both fixed and rotary-wing aircraft. ASG also provides access to a significant customer base around the world with the help of its exclusive partners. ASG provides its clients with the following business aviation services: Sales & Acquisitions | Market Research and Consulting | Operational Oversight | Luxury Charter Services The acclaimed Asian Sky Fleet Reports are produced by ASG’s market research and consulting team, in collaboration with Asian Sky Media — a branch of ASG focusing on media and publications. Asian Sky Media has a growing portfolio of business aviation reports designed to provide valuable information to readers for a better understanding of the market. Included in the portfolio is the Asia Pacific Fleet Reports for both civil helicopters and business jets. Asian Sky Quarterly provides a reader-friendly look at market dynamics within the pre-owned markets of civil helicopters and business jets. ASG’s reports include the Asia Pacific Business Jet Charter Report, the Asia Pacific Training Report, the Asia Pacific Infrastructure Report and China General Aviation Report focusing on specific industry segments showcasing the current status and challenges of the industry. DISCLAIMER The information contained in this report is for reference only. While such information was compiled using the best available data as of June 30, 2018, ASG makes no warranties, either expressed or implied, concerning the accuracy, completeness, reliability, or suitability of such information. ASG is not responsible for, and expressly disclaims any and all liability for damages of any kind, either direct or indirect, arising out of use, reference to, or reliance on any information contained within this report. CONTRIBUTION ASG would like to acknowledge the gracious contributions made by numerous organization, including aircraft operators, charter brokers, aviation authorities and JETNET LLC in providing data for this report. Special thanks to Air Charter Service (www.aircharter.com.hk) and Phenix Jet ([email protected]) for providing market insight. And thank you to Conklin & de Decker Associates for supplying images used in the Popular Models for Charter. Should you wish to reproduce or distribute any portion of this report, in part or in full, you may do so by mentioning the source as: “Asian Sky Group, a Hong Kong-based business aviation consulting group”. For information about our aviation services, please contact: [email protected] or visit www.asianskygroup.com. For information regarding ASG publications, please contact: [email protected] or visit www.asianskymedia.com. CONTACT Suite 1401, 14/F, Fortis Tower, 77-79 Gloucester Road, Wan Chai, Hong Kong Telephone +852 2235 9222 | Facsimile +852 2528 2766 II | SUMMER 2018 CHARTER REPORT CONTENTS 02 PUBLISHER’S NOTE 22 POPULAR CHARTER FLIGHT ROUTES EXECUTIVE SUMMARY INTERVIEW: SHENZHEN FUNIAN 03 24 BUSINESS AVIATION CO., LTD 04 MARKET OVERVIEW 26 COUNTRY PROFILES 12 FACTORS IMPACTING CHARTER 39 CHARTER FLEET BY OEM 14 REGULATIONS 42 CHARTER MOBILE APPS 16 AIRCRAFT MODEL POSITIONING 43 JET CHARTER MEMBERSHIPS 18 INTERVIEW: AIR CHARTER SERVICE 44 POPULAR MODELS FOR CHARTER 20 CHARTER DEMAND SUMMER 2018 CHARTER REPORT | 1 PUBLISHER’S NOTE usiness aviation is a dynamic industry, made up of various sectors. But, perhaps, the most well-known and long B standing of these is charter. Even since the first Lockheed JetStar flew in 1957 business jets have been available for hire. But once regarded as a lavish indulgence, chartering a business jet for a flight is now moving mainstream. In the Asia Pacific region, corporate users make up the majority of charterers, but the growing demand from all sorts of users has pushed the industry to diversify. Now, membership schemes and easy booking via mobile apps and online platforms has made charter more complex in its offerings and but importantly more accessible. Often the first exposure to business aviation and its benefits comes from chartering so this sector of the industry plays a vital role. Still, the Asia Pacific has a long way to go before it sees any Uber-like operations — a widespread trend visible in the US. As with the whole of business aviation in this region, the charter market faces hurdles — infrastructure, operational regulations and airspace limitations, to name a few. This region is also seeing a growing number of Part 91 aircraft owners offering “charter”, particularly in Hong Kong and China. The continued presence of these private owners offering their aircraft for hire has created tension and competition with legitimate Part 135 charter operators. This remains a critical challenge for the industry as it impedes further investment. Though the challenges seem to be ongoing, the number of business jets in the region saw an increase, as of yearend 2017. The total business jet fleet grew almost 3% from 2016, with a total of 1,182 based in the region. Likewise, those used for charter saw a 5% growth from the Summer 2016, with a total of 310. That’s 26% of the total fleet being used for charter. For the second issue of Asian Sky Group’s Asia Pacific Business Jet Charter Report, we’ll touch on the above topics, plus expand on the information brought to you in our inaugural report — the state of the fleet, challenges the market faces and the future of charter. This Summer’s report also takes a closer look at the operating regulations of each regional country, showcases the correlation of high-net-worth and ultra-high-net-worth with charter and features data on the most popular charter routes in the region. As always, we, at Asian Sky Group, hope that the information provided within this report is informative and useful. Sincerely, Jeffrey C. Lowe Managing Director, Asian Sky Group 2 | SUMMER 2018 CHARTER REPORT EXECUTIVE SUMMARY s of June 2018, there were 311 business jets in the Asia- Pacific region used for charter; a five percent increase from A the 296 business jets used for charter in 2016. The 311 business jets represent 26% of the total regional fleet. Mainland China, Australia and India were home to the three largest charter fleets in the region, with 87, 65 and 59 aircraft, respectively. While Mainland China and India are notable for their economic growth and large populations, Australia is notable for having one of the most mature and well-developed business aviation environments in the region. 84 business jets were added to the Asia-Pacific charter market, while 69 were removed from the market. Newly-added charter aircraft included new deliveries (2) and pre-owned (25) additions, as well as those that recently changed their mission to charter (57). Fleet deductions consisted of aircraft that were no longer available for charter (37), along with those that were sold or relocated (19) to other countries and aircraft placed into retirement (13). Mainland China had the largest fleet expansion between 2016 and 2018, increasing from 62 to 87 business jets; a 40% increase. This growth illustrates the potential of Mainland China’s charter market. The Philippines had the second largest fleet increase, with three business jets added marking a 30% fleet growth. Other regions that saw fleet growth include New Caledonia (2), Japan (1), Papua New Guinea (1), Bangladesh (1) and New Zealand (1). Bombardier led the charter market with 79 aircraft, making up 25% of the region’s charter fleet. Cessna – the second most preferred OEM — had 61 business jets for charter in the Asia Pacific, occupying 20% of the market. Large aircraft dominated the market with a 30% share (94) and a 21% growth rate, compared to 2016. China and India — the two largest markets — were dominated by large aircraft, with almost half of each fleet belonging to this size category. Light aircraft occupied the second largest share, with a 23% share (70). The average age of a business jet used for charter in the region is 14 years. Malaysia has the oldest fleet (25), while Bangladesh has the youngest (6). SUMMER 2018 CHARTER REPORT | 3 MARKET OVERVIEW 87 62 12 13 3 3 14% 16% 22% 24% South Korea Japan 60 59 33 20% 25% 1213 Mainland China 4 4 1 6288 12 9 25% 3 2 17% 17% Bangladesh Taiwan 9% 6% 25% 20% Hong Kong 43% 42% Macau India 1 32 16 44 13 1210 42% 33% 6059 16Thailand13 13 13 21% 26% 13Singapore13 13 10 1 25% 22% 25% 70 Indonesia PNG 65 1310 1 2 100% New Caledonia2 39% 36% 70Australia67 4 | SUMMER 2018 CHARTER REPORT 4 | SUMMER 2018 CHARTER REPORT MARKET OVERVIEW 1 ACTIVE CHARTER FLEET ASIA PACIFIC BUSINESS JET CHARTER 296 311 LARGEST MARKET 87 26% 26% MAINLAND CHINA 2016 2018 NOTE: Charter fleet as a percentage of total fleet. LARGEST NET FLEET ADDITION +25 2526 MAINLAND CHINA LARGEST NET FLEET DEDUCTION -5 AUSTRALIA 13 10 Fleet Growth for the 20% 28% Major Markets Philippines 15 12 Net Fleet Growth Growth Rate 27% 20% REGION 2018 2018 1013 Malaysia Greater China 21 26% East Asia 1 7% South Asia - - 1513 Oceania -1 -1% Southeast Asia -6 -9% TOTAL 15 5% COUNTRY (REGION) 2018 2018 Mainland China 25 40% Philippines 3 30% New Caledonia 2 - PNG 1 - Japan 1 8% New Zealand 1 33% Bangladesh 1 - Singapore - - Taiwan - - South Korea - - Macau -1 -33% India -1 -2% Indonesia -3 -23% Hong Kong -3 -25% 4 3 Thailand -3 -19% 20% 24% Malaysia -3 -20% New Zealand Australia -5 -7% 34 TOTAL 15 5% NOTE (1): Fleet distribution is based on business jets in service and their active base of operation.