Forget Economy, Private Jets Go Mass Market

South China Morning Post

(Feb. 8, 2012) - Need a holiday - and your friends look like they could do with one, too?  How about a quick trip to Fiji in the South Pacific or maybe a jaunt to Indonesia for all of you? You'll travel by private jet and enjoy lavish service at an all-inclusive resort - all from a mere US$12,500 per person for a group of 20.

Say hello to Anjet, a California-based broker of private jets that has just brought its five-star service to Hong Kong and the mainland. Its arrival is one of the more conspicuous signs of growth in Hong Kong's private-jet industry.

The city has become a pivotal point for international jet-hire companies seeking to muscle in on the mainland market. And with China's economy still surging onward, Hong Kong is also the springboard for mainland business-jet operators to go international.  The mainlanders who roam Canton Road in Tsim Sha Tsui in the hunt for luxury handbags and designer clothing are also now being targeted for the bigger-ticket temptations of exotic holidays by private jet.

With economies on the other side of the world gloomy and stagnant, Asia is even more of a prime destination for these operators - and to keep flight times short, they're keeping most of the destinations here.  "We know that our passengers would rather have their feet on the sand than on board," said Anthony Newcombe, president and chief executive of Anjet, which does not actually own any aircraft but acts as the middleman, bringing in customers for charter operators.

The quick growth in the private-jet market is fuelled, in particular, by the overseas expansion strategy of mainland companies. They often need to send top management on multi-destination trips and on schedules commercial airlines cannot accommodate.  "In the next 10 years, increasing numbers of mainland companies will set up headquarters in Hong Kong for overseeing their overseas operations," said Chris Buchholz, chief executive of Hong Kong Jet, which is owned by HNA Group, the fourth-largest airline corporation on the mainland.

Newcombe, an avid traveller himself, started his tailor-made tour-package business in the United States in the summer of 2008. Since then, he has organised more than 100 trips for high-paying customers to top destinations.

He opened an office in Central in December and another in Shanghai last month.

For customers headed to private islands and other exotic destinations, the package costs about US$20,000 to US$25,000 per head.

For more familiar tourist spots, such as Bali and Phuket, the fare ranges between US$12,500 and US$15,000 per person, based on a tour of four to seven days.

The number of private jets in China as a whole stood at more than 160 last year, up from only about 10 a decade ago, according to the Asian Sky Group, a private-jet broker with offices in Admiralty.

Approximately 100 of them operate out of the mainland and about 50 from Hong Kong.

Most of the jets were manufactured by the US company Gulfstream Aerospace, followed by Canada's Bombardier and another American maker, Hawker Beechcraft.

Gulfstream aircraft are more popular among mainland buyers because they are larger and have greater range.

The market is tipped to see explosive growth in the coming years. The Cessna Aircraft Company - a US-based business-jet producer - told reporters last week that one of its priorities this year is to develop the Chongqing and Sichuan market.

They are not alone in this. Many private-jet brokers are now eyeing the opportunity to expand their operation from China's coastal areas into inland provinces.

In Chongqing, media reported that at least two local businessmen had bought private jets over the Lunar New Year period and that more than 30 others were in talks with brokers to buy their own jets.

Avion Pacific - a Hong Kong-registered company based in Shenzhen - estimated the number of potential buyers in Chongqing alone at more than 100, according to the Chongqing Commercial Daily. The company is in talks with at least 10 potential buyers.

It is a similar story in many other central and western provinces - where a decade ago the idea of a private jet was still a novel concept.

The HNA Group sees Hong Kong Jet as having the potential to help it expand its private-jet network from the domestic market to the regional and global markets.

It's part of HNA's plan to transform itself into a multinational corporation.

Hong Kong Jet, which had its operating licence approved by the city's Civil Aviation Department in December, aims to expand its fledgling fleet of two planes to as many as 15 by the end of this year and to increase its staff to 100 from 48.

VistaJet, a Switzerland-based private-jet company, is another foreign company hoping to tap into China, as well as Brazil, Russia, India and Nigeria, banking on the rapid growth in global commodity markets and the development of mining and other assets in remote locations.

The private-jet operator said talks were at an advanced stage to establish a joint venture with a local partner on the mainland and it hoped to launch the operation by the end of the year.

The firm, which calls itself the world's fastest-growing private aviation company, provides flights at a fixed hourly rate, as well as on-demand charters of a variety of private jets - from the ultra-long Global Express to the high-altitude 860 kilometre-per-hour Learjet 60 XR - from its operation centres in London, Salzburg, Dubai, Kuala Lumpur and Hong Kong.

Newcombe's new Anjet office in Central is meant to handle customers throughout East and South Asia - including South Korea, Singapore and India - the South Pacific and Australia and New Zealand. It has a staff of four private-jet brokers but plans to increase this to 50 by the end of the year.

And in three to five years, it reckons it will have offices in Shanghai, Beijing and Singapore and employ more than 300 people.

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