Korean Airlines private jet unit targets rich Chinese
Korean Air hopes to persuade billionaires in southern China to charter its luxurious private jets, which can accommodate up to 28 passengers
Korean Airlines plans to capture a larger share of the growing private jet charter business in southern China by marketing its service more widely among the region's growing number of super- wealthy businessmen.
The airline's private jet charter unit, established in 2007, operates from Seoul with a fleet of aircraft including the Boeing Business Jet (BBJ), which can accommodate 16 to 28 passengers for flights of under 12 hours; and a Global Express XRS, which can accommodate up to 13 passengers for flights up to 12 hours.
If flying in a private jet is a luxury reserved for the wealthy, flying in a wide-bodied private jet, such as the BBJ or Airbus Corporate Jet (ACJ), takes travel to a higher level of luxury - at a price.
But Korean Air believes there is a growing market for the service in the region.
Chartering a small-sized private jet, like a Gulfstream 200 which has up to nine seats, for a round trip from Hong Kong to Shanghai, would cost somewhere north of HK$300,000. Charter a BBJ or ACJ, and the price tag shoots up to HK$1 million for the same trip, taking into account relocation costs, hourly flight costs and terminal fees.
There are a number of wide-bodied charters available in the region. Besides Korean Air's BBJ, Beijing Capital Airlines, better known as Deer Jet, has three ACJs in its fleet. However, project brokers said the ACJs were mostly for the use of government officials.
"There are a lot of hidden billionaires in south China who would like to have a unique travel experience," said Eric Chun, a deputy general manager for regional passenger sales at Korean Air. The airline's BBJ aircraft could offer just that, with four bedrooms, 180-degree flat seats and two configurations to accommodate 16 or 28 seats according to travel needs, he added.
Some 40 per cent of the bookings on Korean Air's BBJ were made from Hong Kong, which serves as the regional headquarters of many international private jet brokers. However, few bookings are made by Hong Kong's super-rich as most tycoons in the city have their own private jets.
Existing clients are mainly international entertainment stars who travel with a large entourage, K-pop stars, corporate executives from companies in the Asia-Pacific region, and political heavyweights, Chun said. Trips are made to Japan, Singapore, mainland China, Europe, and as far as to South America.
Private jet charters require a very different business model to scheduled commercial air services. Very few full-service carriers tap into the private jet sector, and Korean Air and Air China are exceptions.
The private jet charter business was a high investment and high return operation, said Chun. "The profit margin of charter service is as high as the first-class cabin in the commercial airlines," he said.