Is the dragon dance about to slow down? Business Aviation in Asia
Björn Näf
Chief Executive Officer
Corporate Jet & Helicopter Finance Asia 2012, Hong Kong
AGENDA
Welcome
The Economy of China
The Challenges that come with operating business jets
– Resources
– Infrastructure
– Culture
Summary
2
THE ECONOMY OF CHINA
3
FAST FACTS FOR BUSINESS AVIATION IN CHINA
4
10.5% Real GDP Growth in
Asia 2007 - 2011
1.4m Millionaire households
in China
#2 Global Luxury Goods
Market
95 Billionaires in China
(USD)
7,212bn GDP 2012
324.5bn Foreign Direct
Investment 2011
61 Companies in Fortune
500
63,500 Ultra High Net Worth
Individuals
ONE AIRCRAFT DELIVERY EVERY THREE DAYS FOR 10 YEARS
Oceania 263 Business Jets
US$6.0bn
China 635 Business Jets
US$21.0bn
Northeast Asia 90 Business Jets
US$2.9bn
South Asia 485 Business Jets
US$12.0bn
Southeast Asia 217 Business Jets
US$6.1bn
Source: Embraer Analysis – totals may differ due to rounding – sustained growth scenario
IT’S AN EXPLOSIVE CHAOTIC GOLD RUSH
6
Complex regulatory
environment
Lack of infrastructure Lack of talent
Balance of growth vs.
quality
Lack of experience in
clients & operators
THE CHALLENGES THAT COME WITH
OPERATING BUSINESS JETS
7
IT’S EASY TO SELL AIRCRAFT, BUT WHERE ARE THE EXPERTS WHO CAN OPERATE THEM?
8
= 100 Units Source: Bombardier Market Forecast 2012-2031 (jets only, excludes very light jets) & Metrojet Analysis, Numbers are rounded Asia includes South East Asia, India, Asia Pacific, Japan & China
1,700
New First Officers
3,400 New Captains
3,400
New Flight Attendants
5,100 New Engineers
New Business Aircraft in Asia by 2021 1,700
WE MUST COOPERATE AND COEXIST TO THRIVE
9
CHINA CURRENTLY LACKS THE INFRASTRUCTURE TO FULLY SUPPORT BUSINESS AVIATION
190 public use airports
Over 110 military only airports
1.6 airports per 100,000 km2 land area
Lack of FBOs
Only 6 MROs
10
EXISTING INFRASTRUCTURE IS FOCUSED ON THE NORTH EAST
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Beijing Shenyang
Dalian
Shanghai
Shenzhen
Beijing
• Beijing Airlines Ltd. • Beijing Capital Airlines Ltd. • CITIC General Aviation Co. Ltd. • Free Sky Aviation Co. Ltd. • Hanneng Business Aviation Co. Ltd. • Big White Bear Aviation Co. Ltd.
Shenyang
• ZYB Lily Jet Co. Ltd.
Dalian
• Hanhua Business Jet Airlines
Shenzhen
• Donghai Jet Co. Ltd. • Asia United Business Aviation Co.
Ltd.
Shanghai
• China Eastern Airlines Executive Air
Circle size indicates the number of aircraft Source: Metrojet Research
WE NEED SOME HOLDING FUEL IN THE TANKS
12
DON’T UNDERESTIMATE YIN-YANG
13
Balanced Approach
“Think globally, act
locally”
East meets West
Achieves Unity
BEING PART OF THE CULTURE IS KEY TO SUCCESS
14
SUMMARY
15
THE DRAGON IS DANCING
Business aviation is growing in China, but…
the Industry needs to cooperate in order to crack the market
be prepared to carry some holding fuel in the tanks
understand and accept the culture
choose your partner carefully
16
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