This year’s ABACE show saw a notable absence in business jet order announcements from Chinese lessors and other buyers, but OEMs are still positive about the long term.
Apart from a handful of quiet announcements, one from Cessna for a Citation XLS+ and another for an undisclosed buyer of a Bombardier Global Series aircraft, the 2015 iteration of China’s most significant private jet show was a non-starter on the orders front.
An official at one business jet firm said that the prevailing austerity measures under the regime of Chinese president Xi Jinping have greatly reduced the acquisition of private jets among wealthy individuals.
“In the past they bought aircraft largely for face, although they are starting to realise the potential for private jets as business tools, but in the current environment they are careful about being too ostentatious,” says the official.
This year’s show contrasted sharply with 2014, which saw leasing firms announce orders for several business aircraft, including Minsheng Financial Leasing’s landmark order for up to 60 Gulfstream aircraft.
An executive at Bombardier, which is the market leader in China along with Gulfstream, says that the outlook is still rosy. He notes that China has relatively few private jets compared with the size of the economy as opposed to Europe or the United States.
“The number of business jets is too low for GDP, which continues to grow,” he says.
Another factor that journalists pressed business jet executives on was the large number of business jets ordered by Chinese leasing firms in recent years. These leasing firms are perceived as competing for the same market as the OEMs.
Both Bombardier and Gulfstream dismiss this proposition, with Bombardier saying that the leasing firms offer the OEMs another avenue to reach customers.
Jeffrey Lowe, managing director of consulting firm Asian Sky Group, is bearish on the private jets sector, and notes another problem area. He contends that the business jet charter market has collapsed under Xi's regime, mainly because the central government, which used to make up about half of the market, has ceased chartering aircraft.
“If you want to buy an airplane in China, this is a good time to be shopping,” says Lowe.
Source: Flight International