Bank's aircraft leasing arm buys five private jets
The aircraft leasing arm of China Merchants Bank made its first move to acquire private jets yesterday by ordering five from US-based Cessna. A preliminary agreement for the order of the five mid-size business jets was signed between Cessna and CMB Financial Leasing at the Asian Business Aviation Conference and Exhibition in Shanghai.
The five Citation Sovereign aircraft, which can carry up to 13 passengers, underlined the demand for business jets in the country, especially from high net worth individuals in Shanghai, said Zhang Yanling, president and chief executive of CMB Financial Leasing.
The catalogue price for the private jets is US$17.5 million apiece.
The order follows Cessna's decision to build a second assembly line for Citation Sovereign in Chengdu in a pact with the Aviation Industry Corporation of China on Friday.
'We believe that moving the assembly line to the mainland could help to stimulate demand for our private jets,' said Michael Shih, Cessna's vice-president of China strategy and business development, 'just like foreign automobile makers have done in the past by moving their assembly lines to the mainland.'
The Chengdu assembly line will also churn out the mid-size Latitude, which is pending certification in the US and is expected to be delivered from Chengdu in 2015.
All Sovereign and Latitude jets will be assembled from the components produced at Cessna's headquarters in Wichita, Kansas state.
In the long run, the Chengdu joint venture will develop locally made Chinese business jets. Cessna expects China to become one of the top 10 markets for business jets by 2025.
Besides Cessna, Avic is also in talks with other manufacturers such Brazil's Embraer for joint ventures to build business jets.
According to the letter of intent signed between Avic and Cessna last week in Beijing, Cessna will help the Chinese aircraft maker set up a sales network, maintenance facilities and a flight training school on the mainland. 'We would like to help China to set up the whole supply chain of general aviation, including business aviation,' Shih said.