Companies involved in Asia-Pacific business aviation are cautious about near term prospects for the sector, and feel that several challenges must be overcome for business aviation to reach its full potential.

During a panel discussion at the CorporateJetInvestor conference in Singapore, sales representatives from four important manufacturers were asked to describe the current market with one word. Two replied “cautious”, one replied “difficult”, and the fourth replied “challenging”.

The annual event brings together executives from airframers, fixed base operators, charter firms, and MRO companies.

All four sales executives noted that new aircraft sales are taking decidedly longer to close, and that global economic uncertainty, compounded by weakness in the resources sector, is delaying buying decisions.

“The OEMs have saturated the Asia-Pacific with sales people and MRO,” said one executive. “Some potential buyers are looking at up to five proposals for business aircraft.”

Other issues that came up during the event were concerns about regulation, infrastructure, and public perceptions about business aviation.

In regard to regulation, the consensus is that regulators fail to appreciate the potential economic importance of business aviation. This manifests itself with a notable shortage of slots at busy airports, challenges involved with financing locally registered aircraft, and high tax rates for imported aircraft and parts.

One MRO executive described problems with moving urgent spares around the region. “If you have an aircraft on the ground, customs officials just don’t understand why it is so urgent for us to get it back in the air.”

There is also a view that private jets are treated as second rate citizens at the region’s airports.

“If there is an A380 landing, he will definitely get priority over a G650,” said an executive with a private jet charter firm. “But the person in the back of the G650 could have more economic impact than everyone on that A380.”

Another executive said there was a case where it took eight hours for a private jet to get clearance to cross a runway in Hong Kong.

In regard to infrastructure, there is limited tarmac space available at key airports, especially given the large footprint of long-range types produced by companies such as Gulfstream, Dassault, and Bombardier. This is compounded by a failure at key airports to maximise space through the more efficient organising of aircraft on the ground.

In addition, the sector feels that the business jet is perceived as a luxury item by the public and regulators, and not as a “business tool” that promotes efficiency and facilitates corporate leadership.

“We hear directly from our customers how the business jet helps them conduct business, but unfortunately client confidentiality means we can’t share these stories,” said one executive.

“There is empirical evidence of fundamental changes to the business jet market post-2008,” says Thomas Kaplan of Ascend Flightglobal Consultancy. “ We see deliveries as a share of fleet are at historical low levels, utilization levels are lower, first owners are keeping their aircraft for longer and depreciation rates are much higher.”

Source: Cirium Dashboard

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