Bizav Faces Challenges in Casting Its Net Across Asia

 - December 2, 2011, 1:15 AM
Growing demand for its charter jet card has spurred growth in Asia Jet’s Hong Kong-based fleet, which includes this Gulfstream G200. Importantly, the aircraft are registered in mainland China (signified by the B- tail number), which means that they can operate freely in the country.

Not without reason, China continues to dominate expectations for business aviation growth in Asia, but the continent as a whole presents a vast if complex opportunity for the industry. Personal wealth is in the ascendency there, with Asians having officially overtaken Europeans in the latest Forbes magazine list of billionaires.

Beyond China and its special administrative regions of Hong Kong and Macau, business aviation buying power is building in many parts of southeast Asia, including Singapore, Malaysia, Indonesia, Thailand, the Philippines, Vietnam and Cambodia. At the same time, there is still rising demand right across the Pacific Rim from Japan in the north to Australasia in the south.

But despite the huge potential, there are some significant barriers to market development in this part of the world. Southeast Asia is highly fragmented in terms of ATC and aviation authority rules. There is also a dearth of suitably qualified staff to deliver services to a consistently high level.

One major area of difficulty is in finding people to manage and support any new aircraft, according to Jean-Noel Robert, Airbus Corporate Jets area sales director for Greater China, Japan and Korea and Asian Business Aviation Association (AsBAA) chairman. He said that management firms in Hong Kong, for example, are turning down opportunities to operate jets simply because they do not believe they can support them adequately in the places where they owners want them to be based.

“There is not enough maintenance or training and [there is] a pilot shortage,” Robert told AIN. He added that other problems are lack of available lift to develop a charter market, plus a dearth of FBO facilities, as well as fuel shortages in some areas.

Along with the growing AsBAA organization, another body working in the region is the Japan Business Aviation Association (JBAA). Japan was in crisis for much of the year; however, it is now recovering from the impact of the earthquake that struck the country in March 2011. Kazuyuki Tamura, JBAA’s director, said that the Japan Civil Aviation Bureau is to relax some of the stricter regulations that hamper private aviation growth. For example, in the future it should be easier to register aircraft in Japan, which will have a knock-on effect of bolstering the charter industry.

Bolstering the Charter Market

According to AsBAA, one issue hampering development is that it is notably difficult to charter aircraft in some countries in Southeast Asia. However, local companies are bullish about future prospects.

Simon Wagstaff, CEO of Hong Kong-based aviation services company the ASA Group, told AIN: “We’ve seen a good upturn in the last couple of months with lots of new charter inquiries and a few new handling clients too.” ASA has just signed two representative agreements with Western companies: UK charter company Avolus, to market the latter’s jet card program; and U.S.-based Florida Jet to buy and sell aircraft.

Another company that says it is making steady inroads into the charter market is Hong Kong-based Asia Jet. A Kadoorie Group subsidiary, the jet card seller introduced the first Cessna Citation XLS+ into Hong Kong this year. The XLS+ can fly many typical trips required, such as from Hong Kong to Shanghai, Guangzhou to Beijing, or Ho Chi Minh to Macau.

Hong Kong-based Asia Jet offers both jet card membership and ownership programs and has branches in Shanghai, Beijing and Tokyo. “We’re really busy,” said CEO Mike Walsh. “We take care of everything for our clients, from sourcing the right aircraft to negotiating the best price, to managing them, to offering fleet access by hourly purchase.” Although Walsh conceded that there is a squeeze on aircraft available for charter, he believes the market is gradually opening. ”There is certainly the will to fly privately, even though there is a lack of aircraft at the moment,” he commented.

Former Metrojet CEO Chris Buccholz recently took the helm at Hainan Airlines subsidiary Hongkong Jet. He pointed to the importance of Southeast Asia, saying, ”We are in the Asia-Pacific century, and more and more senior executives and business leaders are requiring business jet transportation for conducting business around the region.” The company received an air operator’s certificate from Hong Kong’s Civil Aviaton Department on November 7.

Metrojet itself is now forging alliances with several foreign entities with a view to spreading its network farther into Asia. In addition to development work at Clark Airport in the Philippines, earlier this year the company announced its intention to partner with Taj Air (part of India’s Tata Group) to offer business jet maintenance and management services at Mumbai.

Another new string to Metrojet’s bow is a prospective partnership with Canadian completions and refurbishment specialist Flying Colours. The companies have signed a memorandum of understanding that could see them working on the interiors of mid- to large-size business jets owned by Asian clients. Most aircraft arriving in the region today are new and come with factory-standard interiors, but Flying Colours can already envision Asian demand for refurbished models.

Britain’s Gama Group also recently announced an expansion into Asia. The charter, management and maintenance company’s CEO, Marwan Khalek, said, “We are building the foundations now with a view to getting established in Hong Kong in the first half of 2012.” The company plans to offer the same services it provides in Europe, the Middle East and the U.S.

Meanwhile the managed fleet of Hong Kong-based Business Aviation Asia (BAA) is set to grow to 34 aircraft by the end of this year, with more to come next year. The company manages a fleet of 23 privately owned business jets, most of which are registered and based in Mainland China.

“We have to be careful about what we take on,” said director of sales and marketing Jeff Lowe. “We get inquiries constantly and are incredibly busy. It is a question of really managing resources and educating our clients about the safest way possible to operate their aircraft.”

It is a measure of how quickly the market is growing that BAA–awarded its Chinese air operator’s certificate (AOC) in mid-2007–has operations and maintenance bases in seven cities: Shenzhen, Tianjin, Beijing, Shanghai, Hangzhou, Chengdu and Hong Kong. The company has 263 employees today, and says its staff will grow to 340 by year-end.

Jolie Howard, business development director of TAG Asia, sounded another note of caution. She said it is important to educate owners about requirements for importing assets, as this could affect owners flying out of the region. “We heard of a recent case where an aircraft was impounded in Germany as the buyer had not paid the proper tax when he exported it,” she said. “It is so important to do things properly.”


The fatal problem to development of Bizav in Japan is not lack of infrastructure but lack of understanding about importance of Business Jets. Even among business leaders, its importance hasn't been understood.
'Bizjet is not match Japanese business culture,' they insist, 'A lot of Japanese companies attach importance not to leadership but to consensus.' But it is excuse for not to be able to make full use of Bizjet. They are so indecisiveness and are so 'big fish in a small pond' that not a few foreign companies turned their back on Japanese.
We, Japanese, no longer are leading player in global economy, so we must take 'face to face' communication with foreign people more and more. Bizjet is the tool for that. Can Japanese understand it? My home country stands at a crossroad.

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