Asian Sky Group’s fourth edition of its Business Jet Fleet Report, released this week at ABACE 2016, revealed some interesting data about the strengths and weaknesses in the business aviation industry in the Asia Pacific region. One change from last year’s report is that the latest version now includes New Zealand, Australia and India as part of Asia Pacific, better reflecting the way aircraft manufacturers tally their sales activity. The report includes only business jets–not turboprops or piston-powered aircraft, although Asian Sky plans to address those markets at some point.
Speaking to AIN at the company’s Hong Kong just before ABACE 2016, Asian Sky managing director Jeffrey Lowe said the Asia Pacific region is of particular interest to the company since it has a Singaporean owner (the company is owned by China’s Avion Pacific and Seacor, which also owns Hawker Pacific). Lowe said Asian Sky had been very thorough and had “contacted all the operators” in the region to establish where aircraft are actually based, no matter where they are registered, and which aircraft “are actually operating.”
Lowe said that various sources are used to build its fleet database, including Flightglobal Ascend, JetNet and operator data. “We overlay our own data on that,” he said. “Other databases tend to trail the market by several months, but we call them up and get the latest. It’s not enough just to get lists of business jets.” The jets examined for the report are new and pre-owned business jets, and not only those entering the various countries in the region, but those that depart as well.
Lowe said Asian Sky (Booth P108) is seeing “more sales” in the market, and “lots of aircraft seem to be leaving the region,” although the number for Greater China in 2015 (38 departures) is lower than for 2013 (at 42) and only slightly higher than 2014 (at 35).
But this still gives the likes of Asian Sky a lot of work. “We’re just as involved when aircraft are being sold, so business is strong for us,” he said. What is happening now is “we’re dealing with first-time sellers that we once dealt with as first-time buyers.”
He said that it typically is taking four to six months to sell an aircraft. “Often sellers don’t really understand the market, but eventually they realize they have to get in front of the market to sell their airplanes,” Lowe said, adding that the market “is changing quickly, with lots of other people selling, too, so you need to be aggressive.”
Overall, he predicted, “This year the market won’t be much different from last year…people are now talking about 2017, if then, for an oil price recovery. Everyone’s expecting a quiet market this year.” For helicopters, Lowe said, “When oil hit $50 [a barrel] there was a dramatic effect and it became a buyer’s market.”
Moving on to China specifically, Lowe said that there were three types of sellers: where the seller is in financial difficulties; where the seller “in the current climate feels it is just not the right profile at this point in time, so has decided to sell his business jet;” and the third is “someone who operates for only 100 to 150 hours a year but can’t really justify that. There is no pressure to sell the aircraft but it just doesn’t make sense [to keep it].
“On the other side, those that are busy are looking for good value. For example, you can get a Gulfstream G550 at an attractive price, a brand-new one,” Lowe said. He did recognize however that the Chinese market “is now better educated. A Chinese buyer a couple of years ago would not have touched anything but a new aircraft, but now you can get a two- or three-year-old G550 or 7X [for a very good price].”
Currency is a major driver of the current market, said Lowe. Right across the region but also in China, the U.S. dollar is stronger. “Lots of guys in China are looking to spread renminbi as far as they can as it has also depreciated,” said Lowe.
He concluded by saying Asian Sky had rejoined the Asian Business Aviation Association. “It’s taken a while to get there, but they are doing a good job now. We’re back in as a member–it’s the easiest way for us to add our support. The feather in their cap was CIQ [customs, immigration and quarantine] approval at Zhuhai, so now you can fly to Hong Kong [to drop off passengers] and then crews can reposition and park over in Zhuhai.”
