Bizav in Asia: Service Companies Boost Capacity

 - January 31, 2010, 8:23 PM

Jet Aviation has a long pedigree here in the Asian business aviation community, having established its handling and aircraft support operation at Singapore’s Seletar Airport 15 years ago. Last year, its aircraft management business in the region grew by 20 percent to a fleet of 24 aircraft, nine of which are based in Hong Kong. The Swiss-based group also manages aircraft for clients in Singapore, Thailand, Indonesia, Malaysia and India.

Juerg Reuthinger, Jet Aviation’s senior vice president for aircraft management, acknowledged that, overall, while the growth of the Asian business aviation has continued it has done so at a noticeably slower pace over the past 12 months as the region has had to contend with the fallout from the global economic downturn. Nonetheless, there have been fewer aircraft order cancellations than in other parts of the world, undoubtedly because credit has generally continued to be more readily available here.

“Our [management] clients are mainly big companies using the aircraft as business tools–which is where most of the growth will be–rather than for leisure,” Reuthinger told AIN. “A lot of companies are investing in infrastructure, with new business hubs cropping up across the map, especially in China.”

However, he added, more still needs to be done to provide the infrastructure that business aircraft operators need. While the availability of airport slots and access to airspace is improving in countries like China, plenty more needs to be done on this score if business aviation is to prove its real worth.

The executive charter sector has seen growth with new entrants trying to get established in key markets such as Hong Kong. Reuthinger pointed out that delays in getting the necessary flight and landing permits make it harder for operators to fly on very short notice than in Europe and North America, undermining some of the flexibility that these aircraft were designed to deliver.

“It is important that aircraft ownership [in Asia] is enjoyable and not a hassle, which is not the case if you own an aircraft, and it becomes a disadvantage when you cannot get slots or the handling you need,” commented Reuthinger. This is a key part of Jet Aviation’s mission–to make business aircraft use a blessing rather than a curse.

Building on its presence in Singapore and Hong Kong, Jet Aviation has been expanding into China with a new joint venture in Beijing, which has been providing handling for more than a year. In 2010, line maintenance capability will be added, with plans to provide more extensive base maintenance for various aircraft types running not far behind.

According to Sebastian Groeger, general manager of the group’s Singapore base, it is the Far East’s most extensive business aircraft provider of maintenance, repair and overhaul. It holds engineering approvals for 13 different countries and can support 31 aircraft types, including all members of the Bombardier, Gulfstream and Cessna Citation families.

Last year, the company’s new support facility in Hong Kong added Gulfstream and Bombardier capability, and it also has a line maintenance base at Kuala Lumpur’s Subang Airport. From its bases, Jet Aviation sends out engineers throughout the Asia-Pacific region to provide support at locations that do not have on-site engineering infrastructure for business aircraft.

Groeger said that the first six months of 2009 were somewhat slow in terms of traffic volume handled at Seletar, but that it has since picked up. In particular, Western-owned corporate aircraft have started coming back into the region.
Rival business aviation services group Hawker Pacific shares this perspective on the market. Tony Jones, the company senior vice president for aircraft sales and flight services, told AIN that after a “brief but significant pause throughout 2009” the sector is “moving into a period of sustained growth.”

The Sydney-based company is a long-established dealer for Hawker Beechcraft’s jets and King Air turboprops in Australia and Southeast Asia, as well as representing Bell Helicopters. It sees much more significant business aviation growth throughout the region in the long-term.

According to Hawker Pacific, the rise of low-cost airlines has proved to be a strong sales driver for business aircraft, provoking concern about issues such as security, privacy, limited routes and late arrivals. The increasing value of local currencies against the U.S. dollar has also made this mode of transportation seem more affordable in the Asia-Pacific region. However, Jones added that there is still some reluctance among corporations to accept business aircraft.

Hawker Pacific’s response to a steadily rising market has been to invest in support infrastructure in locations such as Singapore and Malaysia (where it is opening a service center at Kuala Lumpur’s Subang Airport to add to its existing FBO there). This year should see the opening of a new joint-venture FBO in Shanghai. In addition to providing maintenance for the Hawker Beechcraft family, the company also supports Dassault’s Falcons.