BAN's World GazetteerChina
Some 90% of business aviation companies in a recent report on business aviation in Asia have been adversely affected by the current pandemic. Consequently most are very hesitant about meeting their fiscal targets for the year, and the majority are still yet to be convinced the market will bounce back this year. March flight activity in Asia is down 30% YoY, with all the major hubs, such as Beijing, Shanghai, Guangzhou, Hong Kong, Tokyo and Singapore, experiencing declines and negative YoY growth.
Hong Kong business aviation consulting firm Asian Sky Group (ASG) has released its 2020 Q1 edition of Asian Sky Quarterly, complete with an updated forecast on the business jet and civil helicopter markets throughout the Asia Pacific region. This issue focuses on the impact of COVID-19 on the regional business aviation market.
“For us here in Hong Kong, Cathay Pacific has experienced a 99.4% drop in passengers and carried only 582 people a day instead of the usual 100,000 daily volume,” says managing director, Jeffrey Lowe. “Hong Kong International Airport, which handled 71.5 million passengers in 2019, recently had 367 arriving passengers. Devastation is the only word that comes to mind.”
A full understanding of what's going on in the business jet market can be found in this issue's special edition 'Mood & Intentions' Survey, which asks questions on economic optimism, purchase intentions and the impact of the COVID-19 outbreak on respondents' organisations. Also included is a look at Q1 flight activity in the Asia Pacific, which shows the impact of strict travel restrictions implemented throughout Asia and globally.
Along with data on the market and flight activity through Q1 are a number of interviews and commentaries. Law firm, HFW, shares insight on the legal implications of COVID-19. Michael Walsh of Pacific Basin Economic Council and Aer Mobi shares information on sustainability in aviation. Asian Business Aviation Association (AsBAA) chairman, Zhendong Wu and new COO, Jeffrey Chiang, give a look into how AsBAA is handling the pandemic. Also included is a profile on Dassault Aviation, which has incorporated military technology into its line of business jets, and analysis on the pre-owned Dassault Falcon 7X market.
Findings from Asian Sky Quarterly will be released in partnership with the Asian Business Aviation Association (AsBAA) during ASG's Fleet Week (April 21st to April 23rd), an online, multi-media event showcasing the findings from the report. Day one will be a presentation on the Fleet Report and Asian Sky Quarterly findings. Day two will comprise two Q&A sessions on the business jet market and fleet; Session one will consist of questions answered by managing director, Jeff Lowe and co-founder Max Buirski and session two will be a panel discussion with AsBAA board members. Day three will offer further insight and commentary by those involved in business aviation through a series of podcasts.
ASG has also released its Asia Pacific Business Jet Fleet Report for the year end 2019. Providing a comprehensive overview and analysis of the regional business jet fleet as of year end 2019, the annual Fleet Report has become a vital source of information within the business aviation industry.
The latest instalment includes a detailed breakdown of the region's business jet fleet by OEM, country, size category, operator, registration and age. Also included is an update on the top operators in the region, the ranking of each OEM, along with which specific aircraft types are the most popular, an overview of aircraft by registration and an overview of business jet engines used throughout the region.
Highlights of the report include:
- The Asia Pacific business jet fleet stood at 1,213 at year end 2019, an increase of just 0.9% from year end 2018 and the lowest annual growth to date since ASG's first Asia Pacific Fleet Report in 2014. This marks the fifth consecutive year of declining annual growth for the region.
- Overall, the fleet had a net growth of only 11 aircraft in 2019, the culmination of 45 new deliveries and 50 pre-owned additions, offset by 84 deductions.
- Although mainland China saw its fleet decrease for the second consecutive year, with 332 operational business jets, it still has the largest fleet in the region. Australia, India and Hong Kong come in second, third and fourth with 199, 138 and 122 business jets respectively. Collectively these four account for 65% of the Asia Pacific's total operational business jet fleet.
- The regions of Oceania and south east Asia were the fleet growth drivers for 2019; both regions experienced a net fleet growth of 10 jets each. The individual country with the highest net fleet growth was Australia, also adding 10 business jets.
- East Asia (Japan and South Korea) saw the highest growth rate for 2019, with the region's fleet increasing by nine jets for a growth rate of 12% over year end 2018. Japan's fleet grew by eight aircraft (15% growth, second only to Vietnam).
- Transactions decreased significantly in 2019, falling from 54 brand-new transactions and 178 pre-owned transactions in 2018 to only 45 and 120 in 2019 respectively. In terms of units traded, this represents a reduction of almost 30%. In terms of market value, the numbers are equally as eye opening: brand-new transactions fell from US$2.3 billion to US$2.1 billion while pre-owned transactions fell from US$2.5 billion to US$1.7 billion. Combined, the Asia Pacific market lost a total of US$1.1 billion in transaction value through 2019.
- For Asia Pacific owners and operators, offshore registries continue to increase their appeal. The offshore registered fleet grew by 20 aircraft from 145 in 2018 to 165 in 2019 and since year end 2017 has grown by 23%. The majority of the offshore registered aircraft belonged to the long-range size category at 65%. Hong Kong and mainland China had the largest number of offshore registered aircraft at 61 and 38 respectively. With a 50% market share, Cayman Islands VP-C registry was the most popular offshore registration in the Asia-Pacific region.
- The Asia Pacific fleet has been growing year-on-year since 2014 at a compounded growth rate of 2.6%. However, the rate of growth has been decreasing over the past two years to only 0.9% in 2019, the lowest of the past five years. With fleet growth already in decline, the added deterioration of the economic conditions throughout the region increases the odds of future improvement looking even bleaker, with the business jet fleet not expected to grow in the coming year.
“As it turns out 2019 wasn't as bad as I thought it was going to be in regard to the number of aircraft,” says ASG managing director, Jeffrey Lowe. “Yes, I knew the business jet market in Greater China, the biggest in the Asia Pacific and representing 40% of the total fleet, was severely contracting. But, much to my surprise, to the rescue has come from some unlikely regions, like Oceania and east Asia.”
Lowe continued: “The Asia Pacific business jet fleet in 2019 still managed to eke out very marginal growth of 0.9% at year end. It was, however, the worst growth for the last five years and growth has worsened every subsequent year for those five years, which doesn't bode well for year end 2020.”
This edition of the report includes interviews with operators Metrojet, speaking on its new maintenance facility in the Philippines and Sino Jet, discussing its efforts to increase market share in Asia. Also included are profiles on the latest aircraft on the market: the Dassault Falcon 6X, Dassault Falcon special mission aircraft and Gulfstream G700.