Business jet flying away.
Several investment groups in China are planning general-aviation towns where business and social life will revolve around flying.

The Year in Business Aviation in China

BJT published the Chinese-language edition of our award-winning Buyers’ Guide in Shanghai this month. We reported that activity in the region has slowed a


Activity in China has slowed a bit, but that’s good news for some. 

A cooling economy combined with new government policies to control corruption and extravagant spending may have dampened business aviation activity in China this past year, but these factors have also created opportunities for business jet travelers. Moreover, the slowdown has had little impact on regional growth in support services and infrastructure, or on optimism about future prospects.

“It’s not so much a frenzy as it was before, but in the long term it’s going in the right direction,” says Carey Matthews, general manager of Shanghai Hawker Pacific Business Aviation Service Centre at ­Hongqiao International Airport. Matthews reports that Shanghai Hawker Pacific saw 6 percent growth in traffic at its facility last year, while his company expanded its services, becoming an authorized Cessna service center and receiving approval from the Civil Aviation Administration of China to perform structural repairs.

The less froth in the market and the more services, the better, so as a business jet traveler, you could say it was an excellent year. But there’s no denying the impact the government’s anticorruption and austerity campaigns have had on charter activity. 

“We estimate 50 to 60 percent of that market disappeared overnight, by virtue of all the charter flights being government-business driven,” says Robert Molsbergen, president of Executive Jet ­Management, a subsidiary of U.S.-based NetJets. Molsbergen heads NetJets China Business Aviation, which began charter operations last October from its base in Zhuhai with two Hawker 800XP midsize business jets. The company is a joint venture by NetJets and private Chinese investment firms Honey Capital and Fung Investments. 

NetJets China has no current plans to offer the fractional-ownership programs its parent company sells, but it will provide the management services Executive Jet Management specializes in (under the EJM China brand). EJM, which manages more than 200 aircraft worldwide, recently brought aboard its first aircraft in the region, a Hong Kong-based Global 6000. Molsbergen points out that management fees are often offset by discounts on insurance, fuel, crew training and other costs that companies like his can offer owners because of their buying power. 

Meanwhile, the charter downturn has a silver lining for business jet travelers: reduced demand means lower pricing. “It’s a buyer’s market,” says Jeffrey Lowe, director of Hong Kong-based business consultancy Asian Sky Group. “Sometimes when we’re getting [charter] quotes for a client, we look at the numbers and say, ‘I don’t know how [the operator is] making money.’”

Perhaps this heightened competition is what led to Hong Kong-based Metrojet’s recently announced collaboration with Qi, an haute Sichuan-style restaurant that provides menus for the aviation company’s charter customers. In 2013, also, Metrojet formed Metrojet Hanxing Zhuhai, a joint venture with Hanxing Zhuhai General Aviation that operates a maintenance, repair and overhaul facility in Zhuhai. 

Sales of new business jets in China have cooled in the past year. In 2012, however, Harbin Embraer Aircraft Industry announced plans to build Embraer Legacy 600/650 executive jets in the country. (Harbin is a joint venture partnering Brazilian manufacturer Embraer and Harbin Aircraft Industry (Group), a subsidiary of Aviation Industry Corporation of China.) Last June Harbin Embraer delivered a Legacy 650, the first large business jet assembled by a joint venture in China, to ICBC Financial Leasing. This year the company is set to deliver a Legacy 500 midsize jet to its launch customer in China, Jackie Chan.

Currently, several investment groups and agencies are planning to create general-aviation towns, where business and social life will revolve around flying. The proposed Ordos World Aviation Expo Industrial Zone and its World Aviation City in the Inner Mongolia Autonomous Region, announced last fall, aims to spark both an indigenous aircraft industry and high-end tourism. A partnership of the Ordos Airport Industrial Zone (OAIZ) and China Aviation Investment Group, the planned $8 billion industrial zone will feature an eight-square-kilometer airpark along with a shopping mall, amusement park, golf course and boutique hotel. 

“The region is ideally suited for the growth of key industries and foreign investment,” says Wang Jian, OAIZ party committee secretary. A terminal, intended to serve as the airpark’s FBO (aviation ground-support facility), has already been built at Ordos Ejin Horo Airport, and a corporate aircraft exhibition is planned for this September. The grand opening of World Aviation City is slated for Aug. 1, 2016.

China’s Superior Aviation Group announced plans last summer for Superior Aviation Town and Executive Airport, to rise some 10 miles east of Beijing, an airport-centric community focused on general and business aviation. “Superior Aviation Town is as much about encouraging a flying lifestyle as it is about flying airplanes,” says Superior Group CEO Timothy Archer. 

The two-square-mile, $3.2 billion development, which will take an estimated two and a half years to complete, will include a manufacturing center, an exhibition center, residential complexes and what the company promises will be China’s first aero club. The project is being directed by the Superior Freesky Investment Management Company with the support of the Shunyi district’s government. “A lot of provinces within China are trying to create aviation or industrial parks,” says Archer, “but no one is doing it to the scale we are.”

Before you start house hunting at this development or any of the other planned aviation communities, be aware that they may fail to take root. “They all want to create the whole ­industry value chain,” says Kevin Wu, chairman of the Asian Business Aviation Association (AsBAA). “Can you imagine 40 to 50 general-aviation towns in China, where the U.S. has only several? In my opinion, this results in waste.”

While general-aviation town developments seek to bootstrap a homegrown aviation industry and culture, an indigenous capability, and sensibility, is already flowering in China. Last year the former Taeco Cabin Completion Center in Hong Kong changed its name to Haeco Private Jet Solutions, in part to underscore its suite of services covering the entire lifecycle of an executive aircraft. The only company in Asia that has both an Airbus- and Boeing-approved completion facility, it has its sights on the local market. “Ultimately, the objective is to serve ultra-high-net-worth individuals in China,” says Henry Chan, Haeco’s vice president, commercial. 

Haeco also aims to bring traditional homegrown culture to its completions. Last December the company introduced its “Xiao Yao” design concept for executive-configured airliners. The design brings feng shui principles used in traditional Chinese architecture to the cabin, expressed in curving interior lines, relative positioning of living and sleeping areas, and the balance of the “five elements” of fire, earth, metal, water and wood. “We’ve seen good, respectable designs from Europe or the States, but these are modern Western designs,” Chan says. “We have not seen designs that are of genuine heritage and based on the respected philosophy of ancient Chinese philosophers.”

The company’s Haeco Xiamen facility has six massive hangar bays, each capable of accommodating two wide-body and one narrow-body aircraft simultaneously, and the facilities are 80 percent occupied by aircraft undergoing maintenance and refurbishment as well as green completions. 

Wu of the AsBAA sees China’s model of requiring foreign companies to have local partners as a good path forward. “The outsider can bring experience, best practices, and newer business models, and the indigenous partners can put in financing, understanding [of local markets] and connections.” 

Last year China’s Sparkle Roll Technik and completion and refurbishment specialist Flying Colours of Canada, formed a joint venture for business jet cabin modifications and maintenance. In their first project, eight China B-registered Bombardier CRJ-200s are being converted from commuter to executive interiors at Flying Colours’ facility, where Sparkle Roll Technik technicians are learning modification techniques. The final stages of later conversions will be performed at a hangar facility that will be established at Linyi City in Shangdong Province.

With or without formal partners, foreign companies continue to invest in China. In November, UAS International Trip Support opened its Asia Pacific headquarters in Hong Kong and a regional office in Beijing. The Hong Kong location will offer 24/7 service in English, Mandarin and Cantonese. “If a charter or corporate jet needs a landing permit in Wellington for a flight from Bangkok, but they need it relayed in Mandarin, we’ve got them covered,” says Roman Stampouis, the company’s Asia Pacific regional director.

Whatever its current stance toward business aviation, Wu says, China’s Central Government has attached “great importance” to growth of the industry. He points to several measures adopted over the past year, such as simplifying the Air Operators Certificate application process, expanding a subsidy program for segments of the general aviation industry, and supporting the movement of authority for approval of flight plans and other general aviation activities from regional to local authorities.

Removing airspace restrictions remains a challenge. Last November the Central Government hosted a national meeting with civilian and military authorities to develop an implementation plan for loosening strictures. The plan looks good “on paper,” Wu says, but “we need to watch, and to push” to ensure follow through. The AsBAA itself is muscling up to help that effort; the organization added 15 members in the last year, bringing its total to more than 100 companies.

Going forward, realizing China’s business aviation potential and building out its infrastructure will require more than government encouragement, business community buy-in, and money. It will take time. Even if China builds “10 or 15 general aviation airports each year, it still won’t meet demand,” says Wu. “That’s going to be a long process, longer than five or 10 years.”

James Wynbrandt, a private pilot, writes regularly for BJT.