ABACE: Region’s growing market entices attendees

 - February 26, 2008, 6:25 AM

Despite the beginning of the Chinese New Year, Valentine’s Day (a popular holiday in Hong Kong), the fast-approaching Singapore Airshow and temperatures low enough to break a 40-year-record, the third Asian Business Aviation Conference &
Exhibition (ABACE) drew 1,131 people, 29 exhibitors and 14 aircraft on static display. Co-hosted by NBAA and the Asian Business Aviation Association (AsBAA), ABACE is the only Asian event dedicated solely to business aviation.

The one-day event was held in Hong Kong Business Aviation Centre’s cavernous hangar, where many of the local workers providing food service and other support wore ski jackets as protection against the 50 degree F temperatures.
About 100 people attended the opening session, at which NBAA president and CEO Ed Bolen lauded Hong Kong as “synonymous with international trade and commerce.”

Norman Lo, director general of civil aviation for Hong Kong, told the audience that business aviation has played an important role in the Hong Kong economy’s average annual growth rate of 14 percent since 1981.

“In Hong Kong, business aviation is recognized as providing flexibility, reliability and customer satisfaction,” Lo said. “Since 1999, business aviation movements in Hong Kong have increased 19 percent annually and the number of passengers moved by business aircraft has increased at about 24 percent annually.”

Bolen spoke about the region as a whole, commenting, “Over the past five years we’ve really seen business aviation start to grow in sales, manufacturing and use of business aircraft. The economy is growing and capital is spreading to the more remote provinces.”

He pointed out that many areas of China are all but inaccessible except by ground transportation. As a result, some of these locations require days to reach. “As commerce spreads to those regions the demand for fast, efficient air travel will grow. China now has almost 200 airports and it continues to make a tremendous investment in infrastructure while simultaneously opening up more airspace.

“China, in particular, is one of the fastest growing economies in the world and, fueled by the 2008 Beijing Olympic Games, brings exciting opportunities for business aviation growth. Today at ABACE we have operations and regulations panels but we’re also here to listen and learn, to build contacts, form relationships and share information,” he said.

Cautious Optimism
Chuck Woods, chairman of AsBAA, underscored Bolen’s comments but cautioned, “We’ve seen tremendous improvements over the past several years but in general it is fair to say that business aviation is still treated as a second-class citizen in the region. It still takes too long to get permits, costs remain high, there aren’t enough landing slots and there’s still little infrastructure. On the other hand, the good news is there’s only one way for business aviation to go–up!”

The two informational sessions were: “Airspace and Regulatory Issues when Operating in Asia” and “The Challenges of Establishing and Operating Business Flight Departments in Southeast Asia.”

In the first session James Filippatos, FAA assistant administrator for international aviation, said the Administration’s international priorities are aviation safety, NextGen, increasing capacity, environmental stewardship and government/industry partnerships. “We continue to work toward the implementation of performance-based navigation,” he said. The FAA is also instrumental in establishing regional safety groups.

Capt. Victor Liu of the Hong Kong Civil Aeronautics Administration (CAA) addressed themes common to both sessions: the complexity of operating in the region.
“Airspace use has been experiencing rapid growth. There has been an emphasis on infrastructure development and generally improving the climate for business
aviation, but there remain sometimes significant fees, airspace challenges, a shortage of trained technical personnel such as pilots and mechanics, and a lack of maintenance available to aircraft. Even in Hong Kong, a relatively new airport [Chek Lap Kok], there is already need for more parking, taxiways and supporting infrastructure,” he said.

Liu said one of the great promises for the future of business aviation will be the implementation of RVSM in China. “A shift to performance-based navigation will not only increase efficiency but will also enhance safety while reducing fuel consumption.” Liu said en route performance-based navigation is scheduled to be implemented by 2010, while terminal performance-based navigation will be about 30-percent implemented by 2010 and completely in place by 2016.
“I don’t think I’ve ever been so optimistic about the Asian business aviation market in general and specifically in North Asia and China,” Jason Liao, vice chairman of AsBAA and Hawker Beechcraft

regional vice president for China and Southeast Asia, told AIN. “Hong Kong has something like 20 business aircraft already, and the market in China is becoming active. A few years ago it was primarily charter operators, but we’re seeing a significant increase in the number of corporate owners. It has been encouraging.”
Liao said he knows there have been quite a few aircraft orders in the area but says it’s difficult to pin down a number. “It’s a cultural thing. In China people still do not want to show wealth, so all the OEMs keep quiet, but in conversations with my counterparts everyone is confident about the market. I think we’ll start seeing the deliveries hit the market in about 2009. I wouldn’t be surprised if it were in the area of about 10 or more aircraft per year.”

At the Show
Bombardier Aerospace displayed its Challenger 605 and ultra-long-range Global Express XRS.

JAS of Tokyo showed off its affiliate-owned GIV and GV; both are managed and available for charter, with TAG Aviation Asia serving as a non-exclusive charter sales agent. JAS has also opened on Haneda/Tokyo International Airport an FBO that offers a crew and passenger lounge, reception area and a new crew and passenger vehicle.
Lohas Development Group inked a deal at ABACE to offer a Cessna Sovereign for charter through TAG Aviation Asia. The Chungju-si, Korea-based company offers luxury penthouse hotel accommodation and conference services and will extend business jet service to its customers.

Gak-soon Lim, CEO of Lohas Development, said, “We are grateful that TAG Aviation Asia can provide us with aircraft management and operating expertise. Few companies in Korea have private jets, but as it becomes more common we expect the business jet market demand to grow. This will be our first trial for establishing a successful aircraft ownership model in Korea.”

Metrojet announced it has been upgraded to a full Gulfstream authorized warranty repair facility. With a maintenance staff of more than 50 people, Metrojet offers heavy maintenance, including 72- and 144-month inspections and other heavy checks, structural repairs, engines and APU changes and extensive testing and troubleshooting.

Airbus announced an Asian customer has placed a firm order for an Airbus A350 XWB Prestige, the second commitment for the newest model in the Airbus Corporate Jetliner series. (A commitment from another customer was announced during the Dubai Air Show late last year.) The A350-900 will feature a luxurious interior and will be powered by Rolls-Royce Trent XWB87 engines. The choice of completion facility has yet to be announced.

BAA Jet Management of Hong Kong has been chosen to manage the A350 XWB Prestige on behalf of the customer and will base the aircraft in Hong Kong. “We are delighted to be expanding in the VIP widebody field with this latest VIP version of the Airbus A350 XWB, which will join the one that we are already engaged to manage for C Jet, as well as several Airbus Corporate Jetliner family aircraft,” said BAA Jet Management vice chairman Jay Shaw.

While there were plenty of kudos for ABACE, exhibitors did have complaints about the length of the show, wondering why the event was allotted only one day. Neil Harvey, manager for executive aviation for Hunt & Palmer, voiced a common criticism.

He told AIN that during the three-day event last year “we felt like we saw a lot of people. We’re in the business of establishing relationships in which we completely handle our client’s travel needs, at the level of service they require, all over the world. ABACE gives us the opportunity to bring prospective clients to one location and let them see the various types of business aircraft on static display. But how many people will travel any significant distance for a one-day show?”

NBAA’s Kathleen Blouin, senior vice president of conventions, forums and seminars, said the organization surveyed exhibitors going to Singapore who also wanted to attend ABACE.

“We wanted to give them optimal value for transporting equipment and personnel into the region,” she said. “It seemed a single day show was appropriate.”
Blouin said ABACE 2009 will be a two-day event in Hong Kong, to be held February 3 and 4. The show will be at the AsiaWorld Expo Center on the airport and the static
display will again be at the Hong Kong Business Aviation Centre.  

AsBAA Sets 2008 Agenda

Every year the Asian Business Aviation Association (AsBAA) holds its annual general meeting in conjunction with ABACE. Chuck Woods, chairman, presided over the meeting, which included committee reports, an extended discussion about the need for a full-time association director and a board of directors election.

For the purpose of membership, AsBAA defines Asia as Japan, North Korea, South Korea, China, Taiwan, Hong Kong, Macau, the Philippines, Laos, Cambodia, Vietnam, Thailand, Malaysia, Singapore and Myanmar. The organization currently has about 45 members, an approximately 15-percent increase over last year, consisting of a mix of manufacturers, operators and industry support companies.

Woods explained the AsBAA organizational structure is modeled after NBAA but emphasized that, unlike its U.S. counterpart, the Asian organization is better suited for the role of educator than lobbyist. “We’ve had some good movement by our government affairs committee, but clearly it will be a work in progress for many years as we form relationships with the governments of the various Asian countries.”

Woods explained that lobbying in Asia isn’t the same as in the U.S. “If we went to a government aviation entity and said we represent 100 companies, they’d be polite and attentive but not much would happen. Progress will be made only through a membership collective effort because in Asia it’s all about Guanxi [relationships]. Our government affairs committee needs to continue to develop to the point where we’ll have at least one person from every country who is well positioned within their country and has access to the important individuals either politically, socially or both.”

Don Spruston, director general of the International Business Aviation Council (IBAC), brought the members up to date on their application for IBAC membership. IBAC will vote on the application when it meets again at the European Business Aviation Convention & Exhibition in Geneva this spring. “Your presentation to the committee at the NBAA Convention last fall was well received. It was well done and compelling. We’re looking forward to AsBAA being a part of our organization,” he said.

AsBAA vice chairman Jason Liao said one of AsBAA’s main goals for this year is to work with China’s CAAC to help develop appropriate support for the 2008 Olympics. “The challenge is both the availability of landing slots and aircraft parking at Beijing’s Capitol Airport,” he said.

As a result of the election held during the meeting, the 2008 AsBAA Executive board members are: Chuck Woods, chairman, of Jet Asia (Macau); Jason Liao, vice chairman, of Hawker Beechcraft (Beijing); Leslie Merszei, secretary, of OrientSKYs (Bangkok); and Peter Hoi, treasurer, of Gulfstream (Hong Kong). The remaining members of the board include Helena Lang of Hawker Pacific (Shanghai), Prithpal Singh of Executivejets Asia (Singapore) and Toshio Iwata of A-B-I (Tokyo).