Private jets take off in China
Anyone who is anyone in China has a Boeing Business Jet – a BBJ – these days. Boeing has celebrated the completion of Nanshan Jets’ first BBJ for a Chinese customer, a modified 737-700, designed with a traditional business jet interior and bedroom suite with a queen-size bed and seating for 28 passengers. Nice touch, the queen-size bed. Of the seven BBJs due to take to the skies this year with VIP interiors, three are for Asian clients. Nanshan Jet, based at Yantai Laishan International Airport, the combined military and civilian airport at Yantai in Shandong Province, China.
Despite the mainland government’s attempts to curb lavish spending, China’s high net worth individuals still seem to have a healthy appetite for luxury purchases, such as private jets.
Among the richest ever since Yue Zhang, the CEO, chairman and president of energy and construction company Broad Group became China’s first private owner 16 years ago, when he acquired a Cessna Citation jet. By 2007, ten years later, the number of private aircraft had risen to 20 and by 2011, more than 80 private aircraft were buzzing about, according to an executive from the China Business Aviation Group. Currently, according to Jetgala, China’s affluent now have at least 130 private planes.
The number seems to be rising in tandem with the growth in China’s ultra high net worth (UHNW) individuals, expected to exceed 12,250 this year, says wealth intelligence index Wealth X, nine per cent up on last year. The mainland’s UHNW folks’ net worth is forecast to shoot up by eight per cent to US$1.7 trillion (HK$13.2 trillion) this year. So much for a slowing economy. Their spending splurge is expected to reach US$7 billion (HK$54 billion) this year. The estimated 1,245 Chinese UHNWs worth over US$215 million (HK$1.67 billion) are expected to double the number of private aircraft owners from 75 last year to 150 this year, Jetgala reports. Wealth X sees dollar signs for private aviation companies, such as Dassault Falcon, Cessna, Bombardier, Gulfstream and Embraer, all keen to expand their China markets.
Demand seems keen, with Chinese private jet dealer Zhuhai Cirrus Aviation selling 14 aircraft in March alone, just days after its launch. Jetgala says these included US-made Cirrus SR20s and SR22s, which cost US$480,000 and US$790,000 respectively.
Mostly for business
But the majority of the private jet buying spree has been fuelled by business travel. Not surprisingly really, if you have factories dotted all over the country, it makes sense. But with many of the airports in China still ran by the military, it’s far from easy to puddle-hop from A to B. Bureaucracy and red tape continue to clip the wings of Chinese private aircraft owners. Private aviation routes require approval days in advance, with many airports offering only limited landing slots.
But Jetgala reports that the Chinese government is trying to relax aviation regulations and has recently started to widen access for private aviation. Low altitude airspace has also been opened up on a trial basis in the north east, central, and south China, equivalent to one third of China’s total land territory, according to the state air traffic commission. And the Civil Aviation of China said airports specially designed for business aircraft will be built around major cities such as Shanghai and Beijing. So much for austerity: there’s definitely evidence of keen interest and demand for what Jetgala describes as a “bespoke lifestyle” on the mainland.