““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Spotlight on China: ABACE 2012 Shows Value of Chinese Market
Last week in Shanghai marked the beginning of a new era in business aviation. It also represented a major expansion of AIN Publications’ continuing quest to serve the industry and those who employ it around the world.
I am of course referring to the ABACE convention, which, by every measure, proved a resounding success. While this was actually the second ABACE event to be held in Shanghai (the first was in 2005), the ABACE convention last week marked the first extensive effort on the part of National Business Aviation Association (NBAA) and its partner the Shanghai Airport Authority, to establish in China a marketplace for serious buyers to meet sellers.
I was not alone in observing that last week’s event was fascinatingly similar to what we all saw at the first EBACE convention in Europe, in 2001. Many people feel this ABACE convention may soon become larger than the successful EBACE event; count me among those who believe in that prognostication.
The market for business airplanes in China is vibrant, dynamic and clearly on a growth curve. Yes, we as an industry need to conquer a myriad of hurdles for the full market potential in China to properly develop. And NBAA officials are the first to admit that they need to do much fine-tuning at their convention site at the impressive Shanghai Hawker Pacific FBO/MRO facility. But such challenges seem relatively minor compared with the strength of the market right now in China and the speed with which airplanes are moving into the region.
As for AIN: simply put, our publishing effort last week was the most significant success since our beginning 40 years ago at the Cincinnati NBAA convention in 1972. Through an extraordinary effort by our entire company, including the 24 people we transported to Shanghai, we published three magnificent daily issues of ABACE Convention News–issues just like the ones you see at EBACE and NBAA conventions. We also published a Chinese-language edition of Business Jet Traveler’s award-winning annual Buyers’ Guide. We distributed it throughout the ABACE convention and are mailing it to 2,000 high-net-worth individuals throughout China.
Industry participants in Shanghai last week were universally excited by the prospect of a new market reality within this country. Again, many hurdles remain to be overcome, but one senior Shanghai-based executive, who heads up Asia Pacific operations for a multibillion-dollar avionics manufacturer, summed up the situation in one sentence: “We cannot hire people fast enough to take advantage of the opportunities that are coming our way almost every week.” This represents quite a contrast to the focus at this same company’s U.S. and European divisions, which are reducing head-count in a static market.
So clearly, last week’s ABACE convention in China delivered good news on the business aviation front. Keep an eye on AIN as we continue to add communication vehicles–print and digital–to this dynamic market.