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More than half the world’s commercial fleet were represented at Asian Aerospace in Hong Kong
in March
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Hong Kong’s role in the region’s rapidly growing market for commercial and private aviation was evident at the Asian Business Aviation trade event, held in the city in March. Organisers report that the 11 manufacturers, which had 22 jets on display, took orders worth about US$10 billion on the first day alone.
Held alongside Asia’s premier commercial aviation event, Asian Aerospace, trade visitors were up 130 per cent on the previous show two years earlier, and they included more than 500 delegates from Chinese mainland airlines. The global airline representation exceeded 100 carriers, which operate over 11,000 aircraft, accounting for more than half the world's commercial fleet.
The event’s success supports figures from independent private aircraft data service, JetNet, which reported double-digit growth of private planes in Asia-Pacfic region, year-on-year, since 2005, with China recording the highest growth.
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Mike Walsh, Chief Executive, Asia Jet
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Mike Walsh, Chief Executive of Hong Kong-based operator Asia Jet, said Hong Kong offers a convenient and cost-effective location for aviation businesses and their clients. He said this explains why “everyone is trying Hong Kong first, looking to get into China.”
Tax Benefits – and More
Notably, importing aircraft into tax-exempt Hong Kong avoids a 23 per cent tax on the total asset that’s applied on the mainland. But Hong Kong offers other benefits as well, Mr Walsh said.
He cited ease of access and no cabotage issues, as Hong Kong is an island, and every flight in and out of Hong Kong is currently international. “The tax regime is flexible, and the Hong Kong Civil Aviation Department is experienced in accepting general aviation at its airport. Hiring and attracting pilots and crews is easier than on the mainland, where there is a lack of pilots,” added Mr Walsh. “And unless you are like us and have associated your company with a mainland airline as your strategic partner, it is difficult to get the staff required to run a successful operation in China. So Hong Kong is definitely the right platform.”
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Asia Jet is preparing to add new aircraft to its fleet
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Asia Jet is a Hong Kong-registered company established in 2008 under parent company, BVI-held Asia Jet Partners Holdings. It began trading in March 2009, with the launch of the Asia Jet Card Program, the first dedicated Jet Card business in Asia.
Currently, Asia Jet operates a fleet of Gulfstream G-200s, a G4, CL-605 and Hawker 800. Mr Walsh said that, within the next four months, there will be an additional G-150, G-200 and Citation XLS+, all “brand-new aircraft straight from the manufacturers,” including two that are the first of their kind for the region. Asia Jet services include on-demand charter service, block charter (the Jet Card Program), and an ownership programme, in which clients purchase a share of an aircraft.
Flying Limousines
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Jackie Wu, Chief Operating Officer, Hong Kong Jet
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Hong Kong Jet, a subsidiary of HNA Group, the fourth-biggest aviation group on the mainland, opened in Hong Kong in 2009. Its first aircraft will be delivered in June. Chief Operating Officer Jackie Wu said growing demand was the reason behind the move.
“We’ve witnessed a 50 per cent growth of business jets in Hong Kong in the past two years, and forecast another 50 per cent growth by 2012. The strong demand is reflected in requests regarding chartering, aircraft management and aircraft acquisition.”
Ms Wu said that Chinese clients account for 30 per cent of all charter enquiries received by the company, and 50 per cent of the aircraft acquisition enquiries.
“Riding on the economy boom of China, entrepreneurs in Hong Kong fly more frequently to explore business opportunities and meet business partners on the mainland,” she said. “They need personalised and flexible transportation tools to accomplish their plans. Entrepreneurs choose private jets over commercial airlines, as it saves time from security checks, long waiting periods, unexpected delays and indirect flights. They may have many meetings in different cities in a day. They take private jets as their own air limousines.”
Ms Wu added that private jet ownership is rising for similar reasons as chartering, especially for wealthy mainland buyers for whom it is a status symbol. “Basing an aircraft in Hong Kong is convenient, as it can accommodate jets in different registration and provide the necessary flexibility. The city is a hub for corporates that would like to develop business in China.”
Expertise on Hand
While agreeing that the absence of import tax is a major incentive for the private aviation business, Ms Wu emphasised Hong Kong’s other advantages.
“Geographically, Hong Kong is a gateway to the China market, possessing well-developed facilities, with comparatively flexible registration procedures and more expertise on hand,” she said. “There are more new private jet operators in the market and aircraft manufacturers setting up branch offices in Hong Kong. We foresee a very positive potential development in Hong Kong.”
Jeff Lowe, Director of Sales and Marketing for Hong Kong-based jet management company Business Aviation Asia Ltd (BAA), agreed that growth in Hong Kong “has been extraordinary over the past five years.” He recalled that, in 1997, there was only one private jet in Hong Kong – a pre-owned Hawker 700 belonging to businessman Sir Michael Kadoorie. Today there are closer to 60.
“In Greater China – the mainland, Hong Kong, Macau and Taiwan – there were an estimated 54 business jets at the end of 2007; today there’s an estimated. 177. That’s 123 more over 3.5 years – 35 per year – so that’s at least 65 per cent growth per year if you assume the same growth per year.” He said BAA will add another 13 to 15 aircraft to its fleet this year.
Related Links
Asia Jet
Asian Business Aviation
Business Aviation Asia Ltd (BAA)
Hong Kong Business Aviation Centre
Hong Kong Jet
