Report: Asia-Pacific Market Growth Driven by Mx Demand
Research conducted by Frost & Sullivan has found that a growing population of wealthy individuals and improving government regulations are making their mark on the business aviation market. As a result of these trends, a greater adoption rate of private business jets can be seen in Asia-Pacific. “There is significant latent potential in the market for original equipment manufacturers to form strategic partnerships with local participants to ensure local presence and reduced turnaround times,” it states.
According to the report, the Asia-Pacific market for FBOs is set to witness stable growth in the maintenance and ground handling segments as service providers prepare to tap the potential from VIP completions in the future. The firm estimates that the market (excluding VIP completions) was worth $43.7 million in 2008 and will reach $74.23 million by 2018. “With a current market potential of more than $45 million and an expected surge in potential by 70 percent through 2018, the future of the Asia-Pacific market is expected to remain on the growth track,” said Frost & Sullivan research analyst Gautam Ratan Kanal.
“The growth rests largely on the sustained growth of business aviation in Hong Kong and Singapore and the adoption of the business aviation model by China. Going forward, business aviation is likely to become a norm for large corporations and [high-net-worth individuals], hence, early adoption will enhance the overall market potential.”
Kanal also said the Asia-Pacific FBO market is primed to gain momentum fueled primarily by Singapore and Hong Kong. “Government regulations, coupled with import regulations and the lack of skilled labor, are dampening the market prospects; however, business aviation is gradually growing in the region. As increased aircraft movements lead to congestion at airports, the need for business jet travel is set to soar.”
Kanal cautions that one of the major challenges lies in “mobilizing technically sound labor” while another challenge pertains to motivating the local market participants to establish relationships with business jet OEMs. “It is vital for existing service providers to understand that as a result of the global economic slowdown, overall spending patterns have been affected,” he said. “Hence institutions that earlier encouraged private jet financing are momentarily on the retreat, even as large-scale expansion of services needs to be carried out with greater care. Having said that, greater acceptance of the business jet operational model in the region and the emergence of Chinese aviation will ensure that the FBO market functions smoothly and grows amid competition.”
Kanal suggests that local market participants need to closely work with OEMs and operators from Europe and North America to be authorized to carry out services that will provide them with greater opportunities. “This approach will also aid in expanding their customer base as a result of being certified to carry out maintenance for various types of jets,” he said. A copy of the report is available to Frost & Sullivan clients.