Mainland helicopter market gets set for lift-off but barriers remain | South China Morning Post
  • Fri
  • Mar 6, 2015
  • Updated: 9:02pm

Mainland helicopter market gets set for lift-off but barriers remain

PUBLISHED : Monday, 27 September, 2010, 12:00am
UPDATED : Monday, 27 September, 2010, 12:00am

The prospect of ferrying deep-pocketed mainland businessmen by helicopter to their villas in Hainan, or flying high rollers to casinos in Macau, is giving a lift to the mainland's aviation industry.

Among businesses responding to the demand are helicopter service and aircraft management companies, industry watchers say.

'The market potential of helicopters on the mainland is tremendous as entrepreneurs demand a more efficient way to travel across the country,' Aerochine Aviation managing director Diana Chou said.

Chou, who has run a sales agency for several private jet manufacturers on the mainland for more than 10 years, set up Aerochine last year to tap into the demand she saw for the helicopter market. She also became the sole representative of Bell Helicopter for the mainland, Hong Kong and Macau. Her company is involved in consultancy work for mainland big spenders setting up helicopter companies.

Chou said there were 10,000 helicopters in service in the United States, compared with just 300 on the mainland, where numbers are limited by infrastructure and air traffic controls.

But Beijing has started to relax the restrictions on general or non-airline aviation, including helicopters and light aircraft, after realising the contribution general aviation could make to the economy.

By the end of this year, two trial schemes will come into effect, in Guangdong province and the mainland's northeast. Certain unrestricted fly zones will be set up to allow general aviation flights to take off after simply notifying the regulator, instead of applying for clearance days in advance.

'The number of helicopters in the country could increase fivefold to 1,500 in 10 years if other factors also come in,' Chou said.

HNA Group's Beijing Capital Airlines announced in June plans to set up a heliport on the outskirts of Beijing. Moreover, some property developers were expected to set up helicopter companies on the mainland to cash in on the lucrative market, Chou said.

'Unlike the private jet business, helicopter service providers must be locally registered and maintain their helicopters locally,' she said. 'It will not work if you try to run a helicopter business on the mainland from headquarters in the United States or Europe.'

First-tier cities such as Beijing, Shanghai, Zhuhai and Shenzhen are the most likely to the first locations for the fledgling helicopter business, Chou said.

Another prospect may be Hainan. 'Hainan is a natural market for helicopters because it is an island without land transport to the mainland,' she said.

The central government has also granted it tax-free status and concessions to stimulate the aviation and tourism industries, prompting many property developers to invest in the island.

'The parcels of land bought may not be close to the two airports on the island, creating a good market potential for helicopter services,' she said.

However, there are still some constraints on the growth in demand for helicopters, including the limited number of heliports and helipads around the country. There is only a handful of such facilities in the Pearl River Delta, including one at Shenzhen International Airport, one at Zhuhai's airport and a police-civil heliport facility in Dongguan, Shenzhen, according to Chou.

In addition, a shortage of pilots and qualified mechanics on the mainland will also curb the growth of the industry. Foreign pilots are required to fly with a local escort beside them on every domestic flight, making it difficult to solve the supply problem simply by importing pilots, she said.

A high tax of about 23 per cent levied on helicopter sales was also an obstacle for the industry. A Bell 429 helicopter equipped to carry eight passengers was US$6.5 million, but after tax this increased to US$8 million, Chou said. A Bell 412, which can carry 15 passengers, would cost US$12.3 million, tax included.

As with the private jet market, the helicopter market would take a few years to lift off on the mainland, Chou said. 'But before long, you will see a helicopter taxi providing shuttle services for commuters to get to downtown Beijing,' she predicted. 'Just like what you see now in New York and London.'

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