China's Deer Jet adds to its fleet

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VIP carrier to introduce Gulfstream IV and Raytheon Premier I and plans tourist charters with 737-300s

Chinese VIP charter operator Deer Jet is adding a Gulfstream IV and Raytheon Premier I to its fleet of six Raytheon Hawker 800XPs. The Hainan Airlines subsidiary also plans to expand into tourist charter flights with two Boeing 737-300s.

Deer Jet will become the second Chinese operator of the GIV this month and the first Chinese operator of the Premier I light jet in the third quarter, say industry sources.

Deer Jet has ordered one new Premier I to test the market for light jet charters in China. "If the market is positive, we will get more," says a Deer Jet source.

The delivery was initially scheduled for late last year, but Deer Jet, which earlier tested the small jet market with a Raytheon Beechjet light business jet, is now committed to taking the Premier I by September.

The mid-size 800XP is the smallest aircraft in the Chinese charter market - Shanghai Airlines also operates one and will take a second by year-end - and operators say there is more demand for small jets rather than larger types.

Deer Jet, however, wants to also test the market for larger aircraft by adding a used GIV, although a company source acknowledges that the aircraft will be tough to sell for charter. The source also says Raytheon is leasing the GIV and Deer Jet may later switch to a super mid-size Hawker Horizon if there is sufficient demand.

Air China has leased a used GIV from Gulfstream since November and is considering adding or switching to a smaller type.

Deer Jet hopes to expand into the larger Boeing Business Jet, but admits the market is not yet mature enough. Instead, the carrier will add one 737-300 at the end of this month and a second in the third quarter. These aircraft will cater to the growing demand for tourist rather than VIP charters.

All four of China's business jet operators are unprofitable, but Deer Jet is enjoying a higher average aircraft utilisation rate than the others, despite having over half of the combined fleet.

BRENDAN SOBIE / SINGAPORE