NetJets Is Bringing Fractional Ownership To China
The world leader in fractional ownership is coming to China, but fractional shares won’t be on its service menu here–at least for the time being. After years of looking to enter the Chinese private aviation market, here at the ABACE show yesterday NetJets finally confirmed plans for a new joint venture in the People’s Republic of China.
However, while NetJets is known as the company that pioneered the sales of aircraft fractional shares in the U.S. and later Europe, its services in China “will begin,” it stated, “only with managing and chartering aircraft that are wholly owned by customers [rather than fractional ownership].
“The Chinese aviation market has phenomenal growth potential and we believe that introducing the NetJets service in China will enhance our brand’s global offering for customers around the globe,” said NetJets chairman and CEO Jordan Hansell. “Our aim is to introduce the NetJets brand of unmatched standards for managing private aircraft and provide aircraft owners in China with the ultimate in safety, security and reliability.”
The NetJets China announcement is a long time coming–the company first embarked on a six-month study of this market in September 2007. It took three more years until NetJets gave the green light for a Chinese venture, saying in October 2010 that it was “filing for certification to create NetJets China later this year.” Just last month, Warren Buffett, chairman of NetJets’ parent company Berkshire Hathaway, said, “NetJets is proceeding on a plan to enter China with some first-class partners, a move that will widen our business [portfolio]”
Subject to Chinese regulatory approvals, NetJets China Business Aviation Ltd. will be a joint venture among U.S.-based NetJets; a consortium of Chinese investors led by Hony Jinsi Investment Management (Beijing) Ltd., a subsidiary of Chinese private-equity firm Hony Capital; and Fung Investments, which is owned by the families of Dr. Victor Fung and Dr. William Fung (the controlling shareholders of the Li & Fung group).
According to NetJets China (Booth P210), the joint venture and its operational base will be headquartered in Zhuhai, in Guangdong province, only about one hour by ferry from Hong Kong. A memorandum of understanding with the Zhuhai Aviation Industry Park was signed in Hong Kong in August and was witnessed by Chinese Vice Premier Li Keqiang.
NetJets China said that the program aircraft will feature a variety of business aircraft types, “each tailored to suit the needs and tastes of the aircraft owners.” After obtaining the necessary licenses from Chinese authorities, the company plans to expand its fleet as new customers join the management program, though it noted that “the future growth of NetJets China will depend on the continued growth and development of the Chinese aviation market,” among other factors.
When operations begin, NetJets China said it will also “welcome customers from the NetJets programs in the United States and Europe to fly within China on the aircraft in the program, subject to availability.” Though it initially will be devoted to the management and operation of business jets, “NetJets China hopes in the future to develop a fractional ownership program for business jets in China.”
Eric Wong has been hired as the vice chairman of NetJets China, and the company said it has also staffed other “key positions” within the organization and is continuing the process of hiring other additional roles.
“The joint venture aims to meet the growing demand in China for exceptional service quality and high safety standards in private jet management services for both corporate and personal use,” said Wong.NetJets China is “witnessing demand from both new domestic customers and established customers in the U.S. and Europe,” he added. “We are excited to provide a NetJets’ presence in China that will provide aircraft owners with superior global coverage and services,” concluded Wong.