The outbreak of the COVID-19 coronavirus has brought unexpected outcomes for Hong Kong’s JetSolution. The business aviation consultant and charter company was able to react quickly and minimize impact to operations. Founder and president Jackie Wu said business is as usual but has seen interesting developments in the field.
Sensing a potential epidemic and not willing to expose any of its staff and potential passengers to the virus, the company repositioned its owned charter aircraft, a Legacy 600, from Hong Kong to California on January 2. Wu said as a charter operator, the company is liable for any penalties according to the Warsaw and Montreal Convention 1999 that are applied to airlines, and some jet operators might not be aware of its risks.
“About 65 percent of our charter are departing or arriving from China, and we were vigilant to the situation and repositioned the aircraft to the U.S.,” Wu said. She added that the uptake of charter in the U.S. is unchanged, and although charter fees are lower in the U.S., it benefits from more mature infrastructure and lower operational costs.
Wu said the virus will definitely affect the Chinese economy severely and, based on her experience during the 2008 financial crisis, she expects owners there to dispose of the aircraft and find ways to liquidate and transact the platform as soon as possible, though that could be hindered by travel bans in and out of China. She believes there could be a 20 percent to 30 percent increase in aircraft available from Greater China for sale in 2020, and markets such as the U.S. have the capability to absorb these preowned assets.
As JetSolution also broker charter business, the closure of casinos in Macau saw more inquiries and flights originating from Macau to gaming cities like Manila, Cambodia, and Singapore. Also during the initial outbreak, the company saw an increased uptake in queries. Eighty percent of such requests were departing from Hong Kong or China to overseas countries, but 50 percent of such requests are flight missions cannot be performed due to the progressive Chinese visitors travel ban.
Wu added that the workload for the company has increased as it has to provide more documentation and evidence of CIQ agencies that the passengers have self quarantined outside China. She noticed that Chinese-registered aircraft would usually raise more questions from CIQ personnel, who are now likely to also request more about the aircraft’s itinerary and movement on top of the passenger’s details.
Thus, Wu believes the Chinese-based operators will be one of the most affected by COVID-19, and while owners begin to dispose of aircraft, the management companies will be hit as well. However, like many economic analysts, Wu thinks it is still too early to tell the outcome of the outbreak since there still is no end in sight yet.