By Lisa Barrington
SINGAPORE (Reuters) – A sharp fall in the number of private jets based in China in recent years shows the impact a weakening domestic economy, anti-corruption drives and the pandemic have had on the country’s wealthiest, according to business aviation industry data and experts.
At the end of last year there were a third fewer private jets based in mainland China, Hong Kong and Macau than the 2017 peak of 481 planes, according to data from business aviation consultancy and broker Asian Sky Group.
In the same period, the number of private jets in the rest of the Asia-Pacific region grew by 20%, led by India, Australia and Japan.
Business jets are specially designed and customisable aircraft bought or chartered by cash-rich and time-poor companies and wealthy individuals.
Flying privately costs from a couple to many thousands of dollars per hour, depending on the size of the aircraft. Even used Falcon 8X jets, a popular long-range model made by France’s Dassault Aviation, can cost about $42 million, according to online listings.
Much of the reduction in China has come from aircraft being sold, such as those owned by property firms like China Evergrande Group after the sector slipped into an unprecedented debt crisis in mid-2021.
Others were moved to places like Singapore and Japan, mirroring an exodus of wealthy Chinese abroad in recent years.
“We’ve picked up some nice management contracts from family owners, family offices that have moved down from Hong Kong into the more secure Singapore region,” Stefan Wood, executive director at private aviation firm Air 7 Asia, told a business aviation conference in Singapore this week.
Singapore has seen steep growth in high-net-worth family offices in recent years. There were 2,000 last year, up from 400 in 2020, authorities have said.
INDIA A BRIGHT SPOT
China remains the largest market in Asia, but “there is a clear reduction in business jet use for corporate flights,” said Dennis Lau, consultancy services director at Asian Sky Group.
VistaJet, a global firm that rents out its own private jets, does not yet see business in China back at pre-COVID levels, Chief Commercial Officer Ian Moore said.
“We have not focused on China as being the epicentre of Asia like you may have done five or 10 years ago. We have seen the growth coming from Southeast Asia, Japan and other regions,” he told Reuters on the sidelines of the Business Aviation Asia Forum and Expo.
Asia-Pacific accounts for just 7% of the global business jet fleet, which is dominated by the huge North American market, but the region is forecast to grow at 2.1% a year over the next 10 years, outstripping the global average of 1.4%, according to the Aviation Week Intelligence Network.
As jet numbers fall in China, Southeast Asian countries like Singapore, Vietnam, Laos, Indonesia and Thailand in particular have seen strong growth rates, albeit from low bases.
The shift is partly to do with Chinese policies, such as crackdowns on ostentatious displays of wealth and long-lasting pandemic restrictions, according to industry executives.
But they said it was also attributable to emerging wealth in countries like India and Vietnam where manufacturing and foreign investment is increasingly moving as international companies look to diversify their supply chains beyond China.
The number of private planes in India has grown by almost a quarter since 2019 to 168 last year.
“India we see as an area of very intense activity that’s certainly expected to grow,” Lau said.
(Reporting by Lisa Barrington; Editing by Jamie Freed)
