Asian start-up BJETS, which ordered 50 business jets two years ago and announced ambitious plans to become the region's first fractional ownership firm, has severely curtailed its ambitions in the face of a weak market.
The company, which ordered 20 Cessna Citation CJ2+s, nine Hawker 850XPs, 11 Hawker 900XPs, and 10 Hawker 4000s in 2008, had planned to take delivery of all the aircraft in five years. They were to have been based in India and Singapore, with the company also planning to offer block charter and aircraft management services.
Industry sources say that BJETS has so far taken delivery of only four aircraft, with three of those based in India and the company becoming a charter firm serving that region. The company has delayed most of the remaining deliveries, and sources say that it could even cancel them.
Chief executive Mark Baier, a former NetJets executive, left abruptly in November. BJETS has lost "a large portion" of its workforce over the last year, say sources.
Bala Ramamoorthy, BJETS founder and managing director, and chief executive of the Briley Group, its biggest shareholder, has reportedly been trying to find new investors for the company. Indian Hotels, operator of the Taj brand of hotels in India and part of the Tata Group, invested in BJETS during its inception. Sources say that it could look to find a way to exit from the company.
"It is a much smaller business than when we first envisioned, and our growth plans have obviously stalled," says a senior company official, who did not want to be identified. "While we were initially very optimistic about the business aviation market, especially in India and South-East Asia, the economic crisis in 2008 and 2009 has affected the segment very badly. We are not sure when things will recover."
The Asian business aviation market dropped dramatically last year due to the crisis, with many players saying that the market has only just begun to pick up. Over the past few months, there has been some renewed interest in the purchase of new business jets. Industry sources say that this is mainly from high net-worth individuals who are spotting bargains in the market due to relatively lower prices from a year before.
The region's business aviation population, however, is unlikely to grow by much in the coming year as much of the interest is in fleet renewal rather than for fleet expansion. Given that many Asian owners are unwilling to let their aircraft out, the region's charter business is also unlikely to take off in a big way in the near future, say the sources.