Asian FBO Stars are Few and Far Between

 - May 1, 2011, 5:10 AM

You would not expect to see a VIP step out of a limousine and walk into a shabby burger bar. Unfortunately, the makeshift buildings and rudimentary facilities on offer at airfields in many parts of Asia offer just such a down-market experience.

In addition to the meager accommodation, there are language barriers, as well as difficulties in obtaining crew and passenger visas in a timely manner, often with short-notice flight changes. As we have seen recently in Japan, the region also suffers from extreme events of nature. There can also be doubts about the availability and quality of catering, as well as security concerns for passengers, crew and aircraft.

Against this backdrop, every major FBO provider is looking to the wider Asia-Pacific region, since the geographical spread will account for the world’s strongest economic growth in future. And regional players also are weighing in. For example, Hong Kong- and China-based aircraft management company BAAsia intends to create a full FBO network across China. The company is constructing an FBO in Tianjin near Beijing, and is planning to develop other facilities. Currently there are few such “VIP” facilities at Chinese airports, but Jeffrey Lowe, director of sales and marketing, told AIN BAAsia will duplicate its Beijing model in other major cities such as Shanghai.

Australia’s Hawker Pacific won the franchise to operate the first true FBO in China in Shanghai. The firm secured its Chinese foothold by entering into a joint venture with the Shanghai Airport Authority, which operates the city’s two airports. The 40,000-sq-ft FBO at Hongquiao Airport opened in spring 2008 and can handle up to 6,000 movements a year.

Apart from Hawker Pacific’s Shanghai operation, the Civil Aviation Administration of China’s (CAAC) development of Tianjin Binhai Airport in the Dongli district near Beijing is due to have a major impact. Tianjin Airport Industrial Park lies to the northeast of the airfield, 69 miles away from Beijing, to which it is connected with high-speed rail links. The park is a special economic zone catering to manufacturing, logistics, high-tech research and development and international trade. “The airport will be a big development in the near future in China,” said Lowe. BAAsia has taken land next to the runway, next door to Airbus. ExecuJet and Jet Aviation have also announced plans for Tianjin, and Lowe added that there is a great deal of interest in the site because many companies believe all business aviation flights into Beijing will be directed there. If this comes to pass then Tianjin is set to be the Chinese capital’s answer to New York-area Teterboro or Paris Le Bourget Airport.

China is gradually starting to provide private aviation services. Other airports offering VIP services include Chengdu Shuangliu International Airport, Guangzhu Baiyun Airport, Shenzhen Airport Feiyue VIP Club, Dalian Airport and Huangzhou Xiaoshan International Airport. 

Hong Kong

Hong Kong is home to the region’s flagship FBO. The Hong Kong Business Aviation Centre (HKBAC) provides support facilities for owners, operators and charter companies. In addition, it offers aircraft refueling, ground handling, passenger services and aircraft hangarage. With 24/7 service it is the most convenient and centrally located arrival and departure point for destinations in Mainland China, Asia and beyond. Jet Aviation and TAG Asia are tenants, as is local maintenance provider Metrojet, which has a hangar on site, housing a $9 million inventory of Gulfstream parts. HKBAC is a private-sector venture backed by several investors, including the Kadoorie Group, parent to Metrojet.

Philippines

Hangar space is at a premium in the region, so Metrojet is to invest $40 million in a seven-acre MRO facility inside the Clark Airport Complex in Pampanga. The company will start construction in June and operations by year-end. Secretary Ramon Carandang of the Philippines Presidential Communications Development and Strategic Planning Office believes that the initiative will help bring his country back into the international aviation fold. He said that these efforts “to improve aviation, to remove many of the restrictions on foreign carriers, to address the technical and safety issues raised by the FAA and the European aviation actions [would] ensure that [the Philippines] becomes a viable place for investments.”

Singapore and Malaysia

Hong Kong has strong competition from Singapore’s Seletar, which is attempting to position itself as the region’s premier aerospace center. In May 2006, the Singapore Government, together with the Economic Development Board and JTC Corp., unveiled a plan for a new S$60 million aerospace park. Slated for completion in 2018, the park will create 10,000 jobs and double the output of the country’s fast-growing aerospace sector, from 2006’s record of S$6.3 billion.

Jet Aviation is there, as are Hawker Pacific and ExecuJet, whose 30,000-sq-ft hangar offers operational and maintenance support to several regional Gulfstream and Bombardier aircraft and is the company’s first foray into the region.

Subang Skypark means to emulate Seletar’s success at Subang Airport in the Malaysian capital Kuala Lumpur. Infrastructure there includes a new FBO facility, offering VIP lounges, meeting rooms and food and beverage services. Other support includes aircraft and ground services, on-site customs and immigration facilities, and dedicated crew amenities and concierge services, as well as MRO facilities. Switzerland-based charter operator VistaJet is a tenant.

In Asia, large global flight planning organizations rely heavily on sophisticated local ground handling and flight planning teams. These teams are essential in airports with little or no infrastructure, such as Hanoi and Cambodia, which, for example, will ground aircraft that do not have enough cash to pay for refueling. “A good ground handler will provide aircraft security and arrange permits, as well as pay for fuel and concierge services,” said Hong Kong-based ASA Group CEO Simon Wagstaff.

FBO development in Asia is still in its infancy, but it is apparent is that there is growing competition in the region, especially in popular destination airports. This will raise the game across the field, transforming the burger-bar experience into breakfast at Tiffany’s. o