Jet Asia carves Pacific Rim bizav market niche

 - May 29, 2008, 6:59 AM

When large areas of the Asian economy tanked in the late 1990s, business aviation in the region suffered. In the Macau/Hong Kong vicinity alone, as many as 30 bizjets ceased operating and have yet to return.

Now, with the economy on the rebound, business aviation is also beginning to recover, and according to its new CEO, Michael Woods, Jet Asia is ideally positioned to take advantage of the growing demand throughout the Pacific Rim for private air travel. “Our shareholders are bullish on the future of business aviation in Asia,” he said. “We weathered the economic downturn nicely and are retooling in preparation for growth.”

Jet Asia was created in 1998 to provide a full turnkey aircraft management service to operate a Challenger 601-3A for Sociedade de Turismo e Diversoes de Macau (STDM). The extensive hotel, casino and transportation company was founded and managed by Macau entrepreneur Dr. Stanley Ho, who found it more efficient to have his airplane managed and made it available for charter when not being used for business purposes. Two years later, Jet Asia found itself logging nearly 800 hr a year and decided to add a Challenger 601-3R to its Macau aircraft operator’s certificate. And the growth of the business is continuing.

“We expect to put nearly 500 hours on each aircraft this year,” noted Woods. Jet Asia also expects to acquire more aircraft in the near future. He said the company will base and operate aircraft anywhere in the region to meet client demand, and it is considering augmenting the Challengers with some smaller and larger business jets. He described Jet Asia as being in a position to assist a client in both acquisition and subsequent management of an aircraft.

Jet Asia has both Challengers on its Macau aircraft operator’s certificate, and because this certification is essentially no different from the requirements for operation by the airline Air Macau, it is more closely equivalent to FAR Part 121 than Part 135.

Emphasis on Safety

With the addition of an avionics technician, the Macau International Airport-based staff will stand at 20, including seven pilots, three flight attendants and seven maintenance technicians. Woods is one of those seven pilots, though he flies only in the right seat. He recently received his Challenger type rating at FlightSafety International’s Tucson, Ariz. facility, but he makes it clear that his job is that of building the business. “I prefer to fly in the right seat as a reserve pilot, with a captain who is a much better pilot than I will ever be.”

Flights normally carry one corporate flight attendant, trained to U.S. standards at the Facts cabin safety course in Olympia, Wash. Both aircraft are equipped with a defibrillator and emergency medical kit, and the company subscribes to an in-flight telemedical emergency service.

Safety is of sufficient importance to Jet Asia that it has successfully undergone a Wyvern safety audit. “To my knowledge, we are the only corporate jet operator in southern Asia to pass this audit,” said Woods.

Jet Asia performs its own light maintenance, and for heavier work it sends its Challengers to the Bombardier-approved service center at Jet Aviation in Singapore. The company subscribes to Bombardier’s SmartParts program for both aircraft, and Woods said they have had good response from Bombardier’s parts depot in Singapore, as well as from its main parts storage in Montreal.

At Macau, Jet Aviation has its own facilities, sharing a Boeing 747 hangar with MASC Ogden. Ground handling is through Jet Asia’s sister company, the Air Luxor FBO. MASC Ogden is the transport-category ground handler at Macau International.

Interesting Mix of Clients

Dr. Ho and STDM business aside, most of Jet Asia’s clientele come from outside the Macau/Hong Kong area. Many use commercial airline service into Macau or Hong Kong as an Asian gateway and switch to Jet Asia service on arrival. And it is an interesting mix of clients, said Woods.

In addition to business travelers, the company has also provided business jet lift for dignitaries such as Britain’s Prince Andrew, former Presidents George Bush and Bill Clinton, World Bank president James Wolfensohn and entertainers Tom Cruise and Ricky Martin.

Woods claims a max range of about 3,200 nm for his Challengers, allowing nonstop operations throughout the Asia region northeast to Japan, south to Indonesia and well into the western reaches of the People’s Republic of China (PRC). Dealing with air traffic control in the PRC is not a problem, he said, but the biggest challenge is getting the proper permits and clearances. “We work with Universal Weather & Aviation, and it has relationships [in China] built over 20 years that we couldn’t hope to have.”

In recent months Jet Asia has refined its approach to doing business in the region. “We used to wait for business,” said Woods. “Now we’re going out and getting it.” This includes working with casinos, tourist organizations and special-event organizers. Jet Asia is one of three launch operators for Bombardier’s new Flexjet Asia charter program.

The company has held discussions with global air ambulance operator SOS International about subcontract work. And Jet Asia is also considering a regional alliance with Bombardier. “What form it will take is still to be determined, but hopefully it will be in place early this year,” noted Woods.

Jet Asia’s U.S. market is sufficiently important to the company to prompt a marketing office in Charlotte, N.C., run by Tim Miller. His job is a little different from that of the marketing department in Macau, explained Woods. He pointed out that while the U.S. is a mature business aviation market, part of the effort in Macau is focused on explaining how business aircraft travel can enhance the bottom line.

Jet Asia, and other business aircraft charter operators, are hoping to benefit from the newly chartered Asian Business Aircraft Association. “It’s a classic case of the chicken and egg over here,” said Woods. “You can’t get the corporate aviation infrastructure improved unless you have sufficient numbers of business aircraft to create demand. But it’s hard to sell airplanes and business airplane travel without the supporting infrastructure.

“ABAA was formed last year by like-minded industry players to educate and lobby for these improvements,” he noted. “It should prove to be a good lobby group for change throughout the region. We spent a lot of time just explaining the difference between business aviation and commercial aviation, and the rules for one may not apply to the other.”

Woods described Macau as “a lovely place to live.” By most accounts, Portuguese, Macanese, Chinese and all the expats get along well together, and thanks to the thousands who fled the area when the PRC assumed control of Hong Kong, there is an abundance of affordable housing. As for the food, there is little that cannot be found in Macau or Hong Kong, he said. “It’s the only place I’ve been where each meal is better than the last.” As for financial advantages, after the first year as a resident, the first $80,000 in salary is not taxed by the U.S.

Woods sees a bright future for business aviation and Jet Asia in the coming decade.
Not only do annual special attention, such as the international Formula 3 automobile race, provide a boost to business aviation, a number of other events are expected to bolster bizjet use in the area in the coming decade:

• Japan and Korea will participate in soccer’s World Cup competition this year.

• The recent entry of the People’s Republic of China into the World Trade Organization.

• Beijing will host the 2008 Summer Olympics.