Corporate aircraft orders from the Asia-Pacific region are gaining pace – it’s still not a flood of orders, but sales are gaining momentum. Most of the business is coming from China and its satellite States, and covers the complete spectrum from VLJs, to what is becoming the norm for the region - long range and VVIP sized aircraft.
Two major Asia-Pacific aviation events have come and gone since the last report; the first Asian Aerospace International Expo Congress in Hong Kong, and Aviation Expo 2007 in Beijing - and even more recent news has come from the recent NBAA Convention in Atlanta. Among some of the main news stories, the Hong Kong Aviation Center’s newly opened $ 12.8m, 38,000 sq ft hangar has doubled the amount of hangarage available to business aviation aircraft at this International Airport. Hong Kong’s business aircraft movements rose to 2,583 in 2006, and the State is seeing one of the highest growth rates in private aircraft registration in the region.
Hawker Beechcraft keeping busy
The first Asian Aerospace International Expo Congress turned out to be great timing for Hawker Beechcraft as it announced 16 new aircraft orders generated from the Asia-Pacific region. Among those, Macau-based Jet Asia, Ltd. ordered four Hawker 900XPs and four Hawker 750s to be used in support of Sociedade de Jogos de Macau, a Macau-based casino company. The first aircraft is due to arrive next month, and the fleet will be dispersed to Shanghai, Macau, Taipei and Kuala Lumpur to give charter clients a more economic alternative to using single-base operators.
Avion Pacific, Ltd. has become a Hawker Beechcraft authorized sales representative (which includes special missions aircraft) with bases in China, Hong Kong and Macau. Avion has ordered two Hawker 4000s, two Hawker 900XPs and two Hawker 750s for customer deliveries slated for 2009. And Beijing-based Deer Jet of China, a Hainan Airlines subsidiary, confirmed its order for a Hawker 900XP (delivery 2009) and a Hawker 850XP (delivery early 2008).
Deer Jet says it is the largest business jet operator in China, and claims to operate 50% of all business jets available for charter there. It has around 2,000 customers, and says revenues are increasing by 20% annually. Its fleet consists of four Hawker 800XPs, and a Gulfstream IV.
Planned fleet additions include three Gulfstream G350s, another GIV due next year, and, in 2011, a Boeing BBJ which is already on firm order. Deer Jet manages a Gulfstream G200 and Beechcraft Premier I for Hangzhou Daoyuan Chemical Fiber Company and the newly ordered Hawker 850XP is destined for this same company. Deer Jet says its Hawkers chalk up 800 flight hours per year each, while the GIV clocks around 700 hours.
Deer Jet is planning for substantial growth over the next five years, and is expanding beyond its charter roots to offer additional services such as fleet management, aircraft maintenance, interior finishing, and FBO service. Three locations for a new FBO are now being assessed - Beijing, Shanghai and Shenzhen. The company says that it hopes to establish FBO operations in all three places over time.
Hawker Beechcraft, meantime, has opened a new sales office in Singapore to cover the Asia-Pacific, the Middle East, India and Africa. The company is co-locating, with its Hawker Pacific Service Center, at the newly named Seletar Aerospace Park. Dan Keady was named as Regional vice president, Sales with responsibilities for this and its four outlying sales offices in Beijing, Dubai, Johannesburg and Australia.
Airbus cashing in
Airbus’s corporate aviation arm has also been active in the region with BAA Jet Management, Ltd. ordering an Airbus A318 Elite for a client, and adding to its single ACJ ordered earlier in the year. The ACJ will be the first such aircraft to be based and registered in the People’s Republic of China and both will be powered by CFM56-5 engines.
BAA will operate its A318 Elite from Shenzhen, near Hong Kong, and it will be registered in the People’s Republic of China. Both will comply with the new Chinese CCAR Part 135 rules. The company, which also has a base in Beijing, offers a complete range of business jet services, including VIP charters, aircraft management, flight support, and aircraft sales and acquisition.
Over the next four years BAA plans to take on more managed aircraft including three Gulfstream G200s (one was due to arrive in September) a G550, G500, a Falcon 2000, 2000EX, 900EX, and a Bombardier Challenger 604. It already operates two G200s, a G450 and GV.
Earlier this year Airbus announced the sale of five ACJ Airbus Corporate Jet family aircraft to Hong Kong companies (three to China Sonangol International Holding Ltd., an oil business enterprise) and one each to BAA Jet Management and Hong Kong Airlines. When added to the five A318 Elites ordered some time ago by an undisclosed Chinese mainland customer, this brings Airbus’ sales total for China to ten aircraft in just two years.
China Sonangol has also ordered two Embraer Legacy 600s, the first to be registered in mainland China, bringing the Brazilian manufacturer’s China tally to three (there is already a Macau-based and registered Legacy). The aircraft will primarily be operated as corporate traveler transporters says Sonangol.
Austrian Salzburg - based VVIP charter company VistaJet, which has just ordered three ACJs, shares the optimism for the Asia-Pacific market. VistaJet’s CEO and president Mr. Bing Chen is on record as saying, “We are strong in Russia and Asia”. His company has come from nowhere in two years, and including the ACJs, will eventually have a business jet fleet of 31 aircraft which includes four Global Express XRSs, three Challenger 850s, two Challenger 300s, and four Challenger 605s.
“We see increasing demand for top-of-the-line corporate jets, such as the Airbus ACJ, as our ‘blue-chip’ clients realize just how much more comfort and space they can get for their money,” says Chen. “As a leader in the European and Russian market, we differentiate ourselves by providing the utmost in service with a fleet that is just two years old on average… the Airbus ACJs will help us to expand in Russia and Asia,” he added.
Adam off the mark
At the smaller end of the business aircraft spectrum, Adam Aircraft’s twin-boom, twin-jet A700 VLJ has gained its first Chinese order with Hainan Zhong Hang Tai General Aviation Airlines, of Hainan, ordering 50 through Ameritech Aerospace. “The business plan of the Chinese company has been developed with the goal of capitalizing on the fast growing general aviation market in China with fractional-share program and air taxi operation in mind,” said Jason Fan, CEO, Hainan Zhong Hong Tai General Airlines LTD. “Due to the immediate charter and air taxi growth opportunities in China, we made the A700 our choice because it has the largest cabin space of all the VLJs.”
He added that there is currently a serious shortage of professional pilots in China, and aircraft management is often faced with difficulties related to flight planning application, ground handling, and maintenance for individual aircraft owners. But he stated, “The A700 owner will be served by a professional pilot/aircraft manager who will be available for all flights and training during a renewable six month period. This new revolutionary program provides the owner with a stress-free aircraft ownership experience.”
Hainan Zhong Hong Tai General Airlines plans to sell the Adam A500 turboprop as well as the A700 aircraft, providing lease back options to owners following delivery of its first A700 in 2008.
Piaggio reaches new markets
Piaggio’s Avanti II continues to expand into new markets as well, after its success in gaining an order for six of the record breaking twin pusher turboprops from Jordan-based Saraya Private Aviation in June. The Italian company announced its first sale to China for three aircraft to be delivered to Sino Europe Aircraft Ltd, at NBAA Convention last month. The deal is worth more than $ 21 million. Sino Europe Aircraft Limited is a company dedicated to representing and promoting aircraft from Europe. Through its association with Beijing PanAm International Aviation Academy, it will promote, operate, and service Piaggio Aero P.180s in that region.
The company says that the P180 Avanti II was selected over its competitors because of its the state of the art glass cockpit avionics, enhanced performance and the lowest operating costs of any stand-up cabin business aircraft. “We have had extraordinary success in both the European and North American business aviation markets. Sino Europe represents the growing demand for our aircraft in new markets like the Far East” said Josè Di Mase, Piaggio Aero CEO. “The Far East business aviation market is expanding rapidly and Piaggio Aero is excited to be participating in that growth.” “We contacted all the major business aircraft manufactures and went through a year-long comparison before coming to this decision,” said Mr. Li Zhi Yun, Sino Europe Aircraft Managing Director. “Thanks to its unique design and characteristics, we feel Piaggio’s P-180 Avanti II is the ideal aircraft for our applications.”
The first of the three aircraft will be delivered in the second quarter of 2008, and join the Chinese Government’s search and rescue operations. The other two Avantis will be delivered in 2009 to Beijing PanAm Aviation Academy, which will be the first academy in China to adopt an advanced Euro-American style training syllabus. It will meet both CCAR Part 141 and CCAR Part 91 requirements (correspondents of the EU JAR and US FAR Part 141 and 91). The aircraft will be used for training as well as operations under Part 135.
The Avanti II was EASA and FAA certified in 2006, and is due to receive its Civil Aviation Authority of China (CAAC) certification before mid 2008 says Piaggio. The company, however, has not yet made clear how the aircraft will be supported in the region, as it recently made clear that it wouldn’t sell an aircraft into a new region without high class maintenance back-up.
Bombardier - Top Dog?
In all, it is believed that there are currently around 20 Chinese registered business jets available for charter, and probably another 30 or so (including Bombardier CRJ derivatives) that are used solely by their owners, including Government, airways inspection and training establishments.
Bombardier says it has sold more business jets in Asia-Pacific than any other manufacturer, and also has a commanding lead in China. The Asian tally, Bombardier says, comes to no fewer than 105 business jets, including 19 ultra-long range Global Express aircraft.
It delivered 26 business jets to Asia-Pacific between 2001 and 2005. That represents 29% of business jet deliveries by all manufacturers, it says. The proportion is probably greater in the China region (including Hong Kong and Macau), where Bombardier says 24 aircraft — nearly a quarter of its entire fleet in Asia-Pacific — is based.
Of these; three are in Macau (the two Challenger 601s and the Global Express), with the two Challenger 604s and Global Express XRS based in Hong Kong. The five Challenger 850s and five of the 870s are in Chinese Government service.
Dassault: ‘Increasingly important region’
Jean Rosanvallon, president and CEO of Dassault Falcon, says that Asia-Pacific is becoming increasingly important to Dassault’s future developments. During the past year, its presence in the Asian market has strengthened with several Falcon 7X sales, and with the first China registered Falcon to enter service.
To accommodate the strong demand, Dassault has increased its marketing presence in the region, expanded customer support, and is evaluating further commitments including the establishment of an Authorized Service Center for mainland China. As previously announced, Dassault recently opened regional offices in both Hong Kong and Kuala Lumpur, and Hawker Pacific has been named as a new sales agent in Australia and New Zealand.
“There’s been a brisk market for business jets in Asia over the past couple of years, particularly in Hong Kong and Malaysia. Mainland China has been slower to mature, but we’ve been successful with the sale of a Falcon 900DX,” said Rosanvallon. “We’re in a strong position to not only take advantage of the market growth, but to service the increasing Falcon traffic in Asia.”
Dassault Falcon already has a 3,100 nm Falcon 2000 based in Beijing and operated by CITIC, the largest state-owned financial services company in China. And Rosanvallon says demand for the Falcon 7X has been strong with several sold in the Asian market. Chinese F7X certification from the CAAC is expected in 2008. “We´re experiencing rapid growth in both the number of Falcons registered in the Asia-Pacific region and the amount of Falcon traffic traveling to, or through, the area,” said Gerry Goguen, senior vice president of Customer Service for Dassault Falcon. “We’re expanding our customer service presence there to meet the needs of all of our operators and to quickly respond to unexpected maintenance issues.” Elsewhere, Peter Edwards, the new Group CEO of Jet Aviation, says of his company’s Asian aspirations, “We are certainly looking carefully at India and China as areas of growth.” His company already operates in Asia-Pacific – at Seletar in Singapore, and Hong Kong. “We are looking at the options for other parts of Asia, including China, and examining OEM sales backlogs, how much those fleets will grow, and the potential of transient traffic in the region.”
In addition, TAG Aviation Aircraft Charter Sales has recently announced it has a Challenger 604 available for charter out of Singapore. The 11-passenger aircraft is operating under FAA Air Carrier Certificate and registered with the US DOT. TAG currently has three GIVs, one Global Express, and now two Challenger 604s in Asia. The plan is to strengthen charter sales and the aircraft management business, as well as providing aircraft acquisition and sales services in Asia. TAG says that aircraft acquisition is increasing in this region, and it will continue to extend and widen its expertise there.
The Chinese CAAC revealed it plans to build a bizjet terminal at Beijing International Airport for the Olympic Games but it is assumed to be a temporary arrangement that will revert to other use afterwards. It is unclear which company will handle the influx of corporate jets from around the world. Ameco Beijing has experience of this and might well offer line maintenance as well.
Meantime, China’s Reduced Vertical Separation Minimum (RVSM) starts at 1600 UTC on 21 November, with its introduction to Chinese civil airspace in the Beijing, Guangzhou, Kunming, Lanzhou, Shanghai, Shenyang, Urumqi and Wuhan FIRs and Sector 01 (airspace over the island) of the Sanya FIR. This has become necessary as China is now running the second largest aviation transportation system in the world, and because the country is due to host the Beijing Olympics next year, and both the Shanghai World Expo and the Guangzhou Asian Games in 2010. This will impose an even higher demand on air transportation and its airspace efficiency.
A major potential problem is seen by some experts in the field as China is the first nation to implement a RVSM system in meters, instead of feet, which could cause confusion on the flightdeck.
The International Civil Aviation Organization (ICAO) RVSM Implementation Task Force is supporting the implementation of vertical separation standard of 300m (1,000ft) and was due to meet to discuss final preparations in late October. Chinese air traffic controllers will assign pilots an RVSM altitude in meters. Pilots are then directed to use a Chinese supplied conversion table and translate the figure into feet. Most commercial aircraft use altimeters that can be set in meters, but this feature will not be allowed in Chinese airspace. Here, then, lies the potential problem with China’s RVSM system.
An example given by one expert says if an aircraft is assigned an RVSM altitude of 9,800 meters, which equals 32,150ft, using the RVSM conversion table, the pilot would round this figure to the closest 100ft mark and then set the airplane on a 32,100ft altitude. The air traffic controller will see the aircraft’s altitude as 9,780 meters, not the assigned altitude of 9,800 meters which could lead to confusion regarding the planned altitude patterns of all flights.
The expert added China’s neighboring countries still use several types of altitude cruising level systems, including the conventional 2,000ft separation. This will require the pilot to adjust the plane’s altitude as it travels from one national air-space to another. A further problem, say the experts, is that the Chinese Air Force works purely in metric, and conversion to feet won’t be popular with the top brass, therefore China will continue with the metric scale for the foreseeable future.