Asia Pacific Region Business Jets

YEAR END 2018 ASIA PACIFIC REGION BUSINESS JETS ASIA PACIFIC BUSINESS JET FLEET REPORT – YEAR END 2018 I 8X_BusinessTool_209x269_BJFR_uk.indd 1 18/03/2019 11:58 CONTENTS 02 PUBLISHER’S NOTE 04 EXECUTIVE SUMMARY 06 MARKET OVERVIEW 12 INTERVIEW: ALEXANDER TANG, GLOBAL JET CAPITAL 14 COMPANY PROFILE: JET SUPPORT SERVICES, INC. (JSSI) 16 MARKET TREND 20 CORPORATE PROFILE: BERMUDA CIVIL AVIATION AUTHORITY 22 INTERVIEW: YJ ZHANG, HONG KONG BELLAWINGS JET 25 OPERATOR OVERVIEW 30 INTERVIEW: JAN GRUBE, LUFTHANSA TECHNIK 34 INTERVIEW: ANDREW SVOBODA, AGENT FOR SERVICE 36 OEM OVERVIEW 40 AIRCRAFT SPOTLIGHT: BOMBARDIER GLOBAL 7500 45 AIRCRAFT SPOTLIGHT: DASSAULT FALCON 8X 50 AIRCRAFT SPOTLIGHT: GULFSTREAM G500 & G600 56 INTERVIEW: SARAH KALMETA, UNIVERSAL WEATHER AND AVIATION, INC. PUBLISHER’S NOTE For those who are willing to All I can add at this point is, thank goodness for Southeast Asia, listen to me at times, you’ll which replaced Mainland China as the engine of growth for 2018. hear me say I always wait And this leads to a completely different predicament for OEMs. with great anticipation for Gulfstream has always been heavily reliant on the Greater China ASG’s Business Jet Fleet market, so as Greater China goes so does Gulfstream. Not too Report. And this is because surprisingly, therefore, Gulfstream’s net growth for 2018 was we all go through the year just a single aircraft, less than 1%. Bombardier, on the other hand, accumulating hunches or who has always had a better fleet distribution throughout the ‘feelings’ on how the year Asia-Pacific region, was the big winner, adding a net 19 aircraft is going to pan out without (6%) for the best growth of 2018. really knowing. At year end, we all try to convince There’s lot more insightful and telling data in the report, but, as ourselves that we know always, the report is also full of other features, including a round- what happened as we plan for next year. up of the region’s top operators and an in-depth look at how exactly each OEM did in 2018. China, for many years, has been the engine of growth for the Asia-Pacific business jet fleet, particularly if you consider Greater This edition of the report also includes interviews with a number China. But 2018 was a challenging year for the PRC with, among of industry leaders: Agent for Service sharing insight on its other things, a trade war with the US and poor macro-economic regulatory support services; Jet Support Services, Inc. (JSSI) results. Consequently, all of us involved in this business aviation breaking down its maintenance program offerings; Global Jet trade ended up feeling — as the year went on — that the inflow Capital speaking on the various forms of aircraft financing and of business jets into the China of the past, one which we had all factors to consider; Bermuda Civil Aviation Authority talking on come to expect and rely on, had now become an outflow. benefits of its offshore registry; Lufthansa Technik advising on its VIP and special mission aircraft completions; and HK Bellawings Well, the data never lies, and we were all correct. As we sharing the operator’s latest news and on its rapid expansion. suspected the business jet fleet in Mainland China in 2018 The YE 2018 Report also looks at some of the latest flagships on contracted 2%, which - when you think about it - is an astonishing the market from the OEMS: Bombardier’s Global 7500, Dassault result. Mainland China led all the Asia-Pacific countries in 2017, Aviation’s Falcon 8X and Gulfstream’s 500 and 600. adding a net 31 aircraft making it the highest growth in the region (10%). 2018 saw Mainland China lose a net 6 aircraft. Sincerely, Jeffrey C. Lowe Managing Director, Asian Sky Group DIFFERENT BY DESIGN. DISRUPTIVE BY CHOICE. Unprecedented performance. Industry-leading technology. Exceptional comfort. Introducing the new midsize Praetor 500 and the super-midsize Praetor 600 – the world’s most disruptive and technologically advanced business jets. A record-breaking best-in-class range. Enviable performance in challenging airports. Full fly-by-wire with active turbulence reduction. Unparalleled comfort in a six-foot-tall, flat-floor cabin. Ka-band home-like connectivity. Power the future. Take command. Lead the way. Learn more at executive.embraer.com. INTRODUCING THE NEW EXECUTIVE SUMMARY THE ASIA-PACIFIC BUSINESS JET FLEET STOOD AT 1,201 JETS AT YEAREND 2018, AN INCREASE OF 1.4% FROM YEAREND 2017. OVERALL THE FLEET WITNESSED A GROWTH OF 17 AIRCRAFT IN 2018, ATTRIBUTED TO 54 NEW DELIVERIES, 55 PRE-OWNED ADDITIONS AND 92 DEDUCTIONS. LONG-RANGE JETS ARE THE MOST POPULAR OF ALL SIZE CATEGORIES IN THE REGION, WITH A 31% MARKET SHARE. NET FLEET GROWTH Positive Negative No Change OEM Size Category 91+0+0 94+0+0 86+0+0 30+0+0 24+0+0 11+0+0 10+0+0 5+0+0 84+0+0 79+0+0 63+0+0 44+0+0 21+0+0 19+0+0 Mainland China, with 338 operational business 0+94+0 0+92+0 0+91+0 0+32+0 0+24+0 0+11+0 0+10+0 0+5+0 0+94+0 0+78+0 0+63+0 0+42+0 0+21+0 0+20+0 0+0+100 0+0+92 0+0+91 0+0+32 0+0+23 0+0+12 0+0+9 0+0+6 0+0+100 0+0+76 0+0+64 0+0+43 0+0+21 0+0+19 jets, has the largest fleet in the region. Australia, 299 313 3% 12% India and Hong Kong come in second, third BOMBARDIER 309 LONG RANGE 351 6% 6% and fourth with 185, 138 and 137 business jets, 328 372 respectively. Collectively, these four regions — Mainland China, Australia, India and Hong Kong 309 294 -2% -1% — are home to 67% of the Asia Pacific’s total TEXTRON 304 LARGE 292 -1% -3% business jet fleet. 302 282 Southeast Asia was a major regional growth driver 284 236 in 2018, with a fleet growth of 6% since yearend 5% -1% GULFSTREAM 299 LIGHT 233 2017. Singapore was the major contributor to the <1% 3% 300 239 growth, with its fleet growing by five aircraft. Greater China, the main growth driver in 2017, 100 165 6% -6% had a dismal performance in 2018. The region DASSAULT 106 MEDIUM 155 0% 3% experienced a negative growth of -0.2% in 2018 106 160 compared to 8% in 2017. Both Mainland China and Hong Kong saw a slowdown in their fleet 79 77 -1% CORP. 3% growth; Mainland China’s growth rate decreased EMBRAER 78 AIRLINER 79 -4% 0% significantly to -2% in 2018 from 10% in 2017 and 75 79 Hong Kong’s growth rate decreased to 1% in 2018 35 72 from 5% in 2017. 6% 3% BOEING 37 VERY LIGHT 74 3% -7% Although Mainland China continues to be the 38 69 largest market in the Asia-Pacific region, the market experienced a net deduction of six in 2018 33 0% — the largest net deduction of the entire region. AIRBUS 33 -6% The number of new deliveries in Mainland China 31 increased from 16 in 2017 to 24 in 2018, however, TOTAL this was offset by a higher number of deductions 18 0% — 15 in 2017 to 39 in 2018. Mainland China also OTHERS 18 2016 (1,157) 17% witnessed a lower number of pre-owned additions 21 2017 (1,184) in 2018; only 9 as compared with 30 in 2017. 2018 (1,201) 4 ASIA PACIFIC BUSINESS JET FLEET REPORT – YEAR END 2018 Global 7500 Now in Service ASIA PACIFIC BUSINESS JET FLEET REPORT – YEAR END 2018 5 DDBA0559_Global7500EIS_AsianSky209X269mm_V4.indd 3 2019-03-26 6:54 AM MARKET OVERVIEW MARKET OVERVIEW 344 338 54 55 21 20 SOUTH KOREA JAPAN 135 137 66 1617 MAINLAND CHINA 25 27 140 138 100999 10 TAIWAN MACAU HONG KONG 78 37 339 33940 48 48 INDIA THAILAND 4140 52 57 11601263 PHILIPPINES1414 SINGAPORE151717MALAYSIA18 43 46 4 4 PNG INDONESIA 1213 184 185 11 AUSTRALIA5455 Note (1): Fleet distribution is based on business jet in service and their active bases of operation. Note (2): Others include Brunei, Bangladesh, Cambodia, New Caledonia, Marshall Islands, Myanmar, Vietnam, Cook Islands and French Polynesia. Note (3): Region is defined in appendix on page 58. 66 ASIA PACIFIC PACIFIC REGION BUSINESS BUSINESS JET FLEET JET FLEET REPORT REPORT – YEAR – YEAR END END 2018 2018 MARKET OVERVIEW BUSINESS JET FLEET 1 1,201 1,157 1,184 LARGEST MARKET 338 MAINLAND CHINA 3.0% 2.3% 1.4% 2016 2017 2018 464850 LARGEST NET FLEET ADDITION +5 SINGAPORE LARGEST NET FLEET DEDUCTION -6 MAINLAND CHINA FLEET GROWTH FOR THE MAJOR MARKETS Net Fleet Growth Growth Rate REGION3 2017 2018 2017 2018 Southeast Asia -16 +14 -6% 6% Oceania +5 +6 2% 3% East Asia - - - - Greater China +36 -1 8% -0.2% South Asia +2 -2 1% -1% TOTAL +27 +17 2.3% 1.4% Net Fleet Growth Growth Rate COUNTRY (REGION) 2017 2018 2017 2018 Singapore -11 +5 -17% 10% Indonesia -5 +3 -10% 7% Malaysia +5 +3 9% 5% New Zealand +1 +3 7% 19% 12 15 Hong Kong +6 +2 5% 1% Taiwan +1 +2 4% 8% OTHERS2 Thailand -1 +2 -3% 5% Australia +4 +1 2% 1% 34 Japan - +1 - 2% Macau -2 +1 -18% 11% Philippines -2 - -4% - PNG - - - - South Korea - -1 - -5% India +2 -2 1% -1% Mainland China +31 -6 10% -2% Others -2 +3 -14% 25% 19 16 TOTAL +27 +17 2.3% 1.4% NEW Sorted by 2018 Net Fleet Growth 5ZEALAND6 ASIA PACIFIC BUSINESS JET FLEET REPORT – YEAR END 2018 7 MARKET OVERVIEW TOTAL FLEET BY COUNTRY (REGION) AND OEM 1,201 in Total BOMBARDIER TEXTRON GULFSTREAM DASSAULT EMBRAER BOEING AIRBUS OTHERS TOTAL % OF TOTAL 100+54+41+40+19+17+16+14+14+11+8+6+6+3+1+4 MAINLAND CHINA 96 42 116 38 19 15 12 338 28% 338 AUSTRALIA 72 77 10 10 8 2 6 185 15% 185 INDIA 27 58 8 23 19 1 2 138 12% 138 HONG KONG 47 2 73 7 2 4 2 137 11% 137 MALAYSIA 20 9 10 7 4 2 5 6 63 5% 63 SINGAPORE 27 6 15 3 3 1 2 57 5% 57 JAPAN 4 30 15 3 1 1 1 55 5% 55 PHILIPPINES 10 21 13 2 2 48 4% 48 INDONESIA 8 15 6 13 2 2 46 4% 46 THAILAND 2 13 11 3 2 4 3 1 39 3% 39 TAIWAN 6 3 12 2 1 3 27 2% 27 SOUTH KOREA 2 9 3 1 4 1 20 2% 20 NEW ZEALAND 3 10 1 4 1 19 2% 19 MACAU 3 4 1 2 10 1% 10 PNG 3 1 4 <1% 4 OTHERS 1 4 3 3 1 3 15 1% 15 TOTAL 328 302 300 106 75 38 31 21 1,201 100% FLEET BY OEM FLEET BY SIZE CATEGORY Airbus 31 (3%) Others 21 (2%) Very Light 69 (6%) Long Range 372 (31%) Boeing 38 (3%) Bombardier 328 (27%) Corp.

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