Chinese business aircraft manager Business Aviation Asia will take a 25% stake in the China unit of fractional ownership firm NetJets.
The pair have already signed an agreement, which is now contingent upon approval by China's Ministry of Commerce and the Civil Aviaton Authorty of China, say representatives of both companies.
NetJets China is a joint venture between the US-based fractional ownership giant and a consortium of Chinese investors, led by private equity firm Hony Capital and Fung Investments. It operates two aircraft on a charter basis in the mainland.
New shares will be issued to accommodate Business Aviation Asia’s stake, thus diluting the stakes of NetJet China’s existing shareholders.
Zhuhai-based NetJets operates two Hawker aircraft in China. Shenzhen-based BAA has been in operation since 2006, manages 56 aircraft, employs 500 staff, and has operations in 12 cities in the Greater China region.
"The deal will combine the global brand of NetJets with BAA's strong local knowledge and strong funding," says Chang Qiu Sheng, chairman of BAA.
Chang adds that BAA hopes to create a membership card programme for NetJets China, suggesting a move toward an actual fractional ownership business model, as opposed to one focused on charters.
Eric Wong, general manager of NetJets China, attributes the selection of BAA to its strong track record, local network, and emphasis on safety.
Wong adds that China's regulatory environment in regard to private jet operations is improving, and the number of high net worth individuals is on the rise. These two trends could eventually see China become one of the world's largest private jet markets.