Private jet travel set to take off on revised rules

PUBLISHED : Friday, 04 September, 2009, 12:00am
UPDATED : Friday, 04 September, 2009, 12:00am

Private jet travel on the mainland is set to boom following an overhaul of the country's cumbersome flight plan system that meant it was often quicker to travel by train than on a US$40 million Gulfstream.

Beijing has cut the approval time for private flight plans from up to six days to as little as three hours in recognition of the fatter wallets of corporate China as well as the growing importance of the upmarket aviation sector to the economy.

Long the ultimate status symbol in the West, the growing convenience of private jets on the mainland is good news for the busy Shanghai executive with an early morning board meeting in Beijing or wanting a late night dalliance with his Shenzhen mistress.

It will also mean bigger orders from private jet manufacturers such as Airbus and Gulfstream and more business for charter operations.

Greater China will overtake the Middle East as the largest corporate jet client for Airbus, the Franco-German aircraft manufacturer, in a few years as perceptions of corporate jets change among the country's rich and powerful.

'There were cultural and political reasons [that dragged down the sales of private jets] as mainland people think that it is not appropriate to show off,' said Francois Chazelle, a vice-president of executive and private aviation at Airbus. 'But that mentality is changing.'

Middle East oil sheiks emerged as the biggest corporate jet clients of Airbus over the past decade. One in two corporate jets sold by the Toulouse-based company is ordered from the region.

But Greater China, a market that Airbus only started to explore five years ago, had ordered 20 of the 150 business jets on its order backlog, Chazelle said. Airbus could convert its commercial jetliners - from the A318 to the A380 - into business jets with tailor-made configurations.

The potential for the mainland market was enormous as the number of mainland billionaires was growing, he added. The ratio of private jets to the number of wealthy people was just one tenth to that in the United States and Europe.

Since the share of buyers coming from Greater China would become increasingly important, Airbus was in talks to establish an outfitting centre on the mainland to let clients choose the preferred wood and leather to decorate their cabins, said Chazelle. It would be the first outfitting centre for Airbus corporate jets outside Europe and the US.

When corporate or private jets first came to the mainland five to six years ago, people thought it was a luxury toy in a country where 70 per cent of people have never flown.

But as the country expanded to become the world's third-biggest economy, corporate jets are now considered a vital business tool - allowing busy executives to travel discreetly and quickly to their chosen destinations.

Beijing's decision to shorten the application time for flight plans was recognition of the contribution of private aviation to the economy, said Jeffrey Lowe, a director of sales and marketing at BAA Jet Management, a Hong Kong-based company that manages seven corporate jets in Hong Kong, Shenzhen and Taiwan.

For example, an A318 Elite or a Gulfstream 200 can now file a flight plan to the regulatory body three to six hours in advance of take-off if it is registered on the mainland. That compared to three to six days previously. The three to six days still applies to foreign-registered aircraft.

It is also getting cheaper to fly domestically registered private jets. A foreign-registered aircraft has to pay a US$4,400 visa fee for each flight plan while for domestic aircraft that can be waived. The navigating fee and parking fee levied on a mainland aircraft was also 40 per cent lower than that on a foreign aircraft, Lowe said.

Beijing was also encouraging more ownership of private aircraft with a planned cut in duties and taxes on the purchase of private jets from 23 per cent to 6 per cent next year.