As business confidence ebbs in Asia-Pacific, the outflow of business aircraft is currently higher than the inflow in the region, with the anticipation that the business jet fleet in the region will shrink by 1 percent to 2 percent in 2019, Jeffrey Lowe, managing director of Asian Sky Group, said in the latest edition of the Asian Sky Quarterly.

The report details responses to a moods and intentions survey, finding a 5 percent increase in pessimism from a year ago. “This has consequently translated into a higher percentage of sellers and a significantly higher percentage of the ‘I’m not sure’ when it comes to purchase intentions, increasing a whopping 10 percent so far through 2019,” Lowe said.

Net deductions to the fleets in Mainland China and Hong Kong are driving the decline, he said, adding in Greater China “optimism has…fallen off a cliff—from a high of 88 percent in first-quarter 2018 to a measly, dark and gloomy 32 percent in third-quarter 2019.”

Exacerbating this situation is a number of aircraft that are sitting idle while tied up in legal proceedings surrounding financial distress. “These cases account for around 10 percent of the fleet,” Lowe said.

But he is optimistic long-term, saying the region is experiencing a market correction from the overheated growth a few years ago and the market is maturing and adapting. “All this that we are currently experiencing is healthy. Asia is entrepreneurial and adaptive by nature, which bodes well for business aviation’s future in the region.”

Generally, respondents to the survey believe the economy has passed or is at its low point and 63 percent believe it will improve in the future. That is a 3 percent increase over the second quarter.