ABACE Convention News

Gama Aviation Eyes Asian Expansion

 - April 13, 2019, 11:00 PM

Farnborough, UK-based Gama Aviation has started to build up its general sales agent (GSA) network in the Asia-Pacific region aimed at getting more aircraft owners in the region using its management services, as it eyes opportunities to grow its footprint out of Hong Kong, particularly into Mainland China. Sergio Oliveira e Silva, managing director of Gama Aviation Asia (Booth B523), told AIN, “The Chinese government is doing very good things that in the mid- to long term will be very good for China."

He continued: “They appreciate international companies that respect compliance,” and suggested, “small Chinese companies will struggle.”

And of Gama’s plans? “We’ll try to replicate in China in the next couple of years what we’d done in Hong Kong [with Hutchison Whampoa]. We’re hoping to identify strong local partners around Asia to act as our GSAs. If that allows us to grow the fleet, it could lead to acquisitions at a later stage. So we want to expand our footprint in Asia, but Hong Kong will always be the regional office for Gama.”

In terms of its regional fleet so far, Oliveira e Silva said, “We now have six aircraft under our management and are going to bring two Globals—a 6000 and an XRS—to the region, fully dedicated to charter.” He confirmed the aircraft belong to a “customer.” “They should be here ready for the summer time. They are currently parked at Bournemouth [Gama’s new facility in the UK]. Charter is getting very busy.”

However, he said, “the market is still very fragmented in Asia, but we know we’ll see bigger companies” through consolidation. “There are still 30-plus companies offering [business aircraft management] in Hong Kong/China. All believe it’s a great idea to open a management company, but they’re finding it’s not as easy as it sounds if you don’t have the knowledge and reach [outside the region].”

Now he says “more and more people are liking the idea of consolidation, but still, clients want a local touch.” For now, however, Gama plans to “grow organically day-by-day, tail number-by-tail number.” He said this is partly because, “For acquisitions, today there are so many opportunities in the market, but expectations are much too high.” He said Gama was approached by one company that thought it was making money “and when we showed them they weren’t, they fired the CFO!”

But if “something turns up that makes sense,” he acknowledged that Gama is ready, noting “there is always a risk when you buy a company.” So he prefers to focus on growing organically. “The GSA concept and evolving the organization is my favored option.”

Oliveira e Silva says the priority countries for Gama are China and Australia, “but most likely the first ones will be Japan and South Korea. We’ll reveal the GSAs at ABACE, hopefully.” He added that “the three main bases” for business aviation in the region today are Hong Kong, Beijing, and Shanghai “so our focus will be on northern China,” as the south is covered by Hong Kong.

Maintenance & Support

On the maintenance side, Gama established a foothold at Hong Kong Chek Lap Kok in late 2017 when it signed a collaboration agreement with China Aircraft Services Ltd (CASL) as the exclusive GSA to sell CASL’s business maintenance capability in Asia.

Oliveira e Silva said, “We are also looking at opportunities in China. If we developed line maintenance in China as we did in the U.S., that would be very useful. I’m a strong believer that China needs a line maintenance network, and we have already started talks. There is a fleet of 300 aircraft based in China with thousands of hours of maintenance required per year, so the market is there.” He noted that at present the majority of aircraft have to go out of China for maintenance. “People have to go to Singapore, or even the U.S., even for a small check. Even in Beijing there are very limited facilities. Or they have to pay a premium for someone to meet them somewhere in China.”

At present, he said, “We work into China from CASL. We run the private jet Part 145 at CASL and it’s something we want to develop further.”

Greater Bay Area

Closer to home, Hong Kong’s only international airport has become an easier place to operate for Gama's customers and other business aircraft operators, said Oliviera e Silva. “Three years ago there were no parking slots; and then there was parking, but no landing slots! It’s easier for us now, but it’s still not like normal airport operations. There are still lots of restrictions.”

He noted fresh impetus at Macau Airport following the Chinese government’s recently published development plan for the Guangdong-Hong Kong-Macau Greater Bay Area. China’s plan identifies Macao as “one of the core engines for regional development,” the aim being “to develop a world-class airport cluster [including] the expansion of Macau International Airport (MIA)…to strengthen the function of MIA and Zhuhai Airport and pursue differential development and positive interaction of airports in the Greater Bay Area.” Relating to business aviation development, it notes that with TAG Macau, MIA now has two FBOs which “have brought a slight increase to the business jets movement of MIA.”

Oliveira e Silva said, “Developments [in Macau] will take five or 10 years…Macau is very [bureaucratic].”

“So we need to find a solution [to Hong Kong’s congestion issue] given that Hong Kong’s third runway will be coming at the same time.” So there is a gap. Regarding Zhuhai, he said, “For many years there was a big question over which airport of the two would be the private jet airport—now we know it will be Macau. It’s a nice airport with lots of opportunities [in the longer term].” There are two bridges to the runway and the plan is to fill the gap to create a large apron for 20 parking slots—this won’t be for some time, but it is the first step in Macau’s expansion. The proposal was in the 1994 Master Plan for the airport, but still hasn’t happened. At present, aircraft are still not permitted to park for more than three days at Macau due to parking limitations.

He said a large maintenance hangar was built but has not yet been signed off as usable, so in the end, Jet Aviation, which had been awarded a contract to run it (around five years ago), “pulled the plug after two years of waiting. So the hangar is still waiting now, and there will eventually be another tender. In the next six-to-10 months, there are no plans to issue it. You could put 10 G550s in that hangar!”

However, there is fresh impetus from the China plan. Given the new bridge/tunnel to Hong Kong (that also connects Zhuhai) “is now functional.” But the border crossing and other factors mean business jet travelers still “prefer Hong Kong.” He said he believed the Government Flying Service (GFS), which has a large apron next to the HKBAC at Chek Lap Kok, and the expansive firefighter training area in the middle of the airport, would be ideal for freeing up business aircraft parking.

But if the Chinese government decides it really wants Macau to become the GBA business aviation airport, it could change in "two-to-three years” and business aviation will have a new home.