Business jet builders geared for expansion
Updated: 2012-12-04 04:07
By Wang Wen (China Daily)
Domestic and foreign business jet builders have been expanding their operations in China to prepare for what is expected to become a boom market in years to come.
One of the highest profile developments has been by China Aviation Industry General Aircraft Co Ltd, a subsidiary of Aviation Industry Corporation of China, which used last month's airshow in Zhuhai, Guangdong, to introduce the prototype of its Primus 150, which will become China's first locally built business aircraft.
The six-seat business aircraft, with a carbon fiber composite airframe, will take its maiden flight in October 2013 and is expected to be put on the market in 2015.
According to CAIGA, the aircraft will be one of the fastest turboprops in the world and already has attracted eight orders from domestic buyers.
Earlier this year, another leading Chinese builder, Commercial Aircraft Corporation of China Ltd, also introduced a version of its ARJ21 regional aircraft aimed at the Chinese business market, which will be delivered in one or two years.
Among the foreign companies preparing for expansion, meanwhile, Dassault Falcon Jet Corp, the French business aircraft manufacture, has announced plans to establish a Beijing branch specializing in business jets which will be run by John Rosanvallon, its president.
China is already the largest source of Dassault Falcon's new orders, said Rosanvallon.
The company delivered its first aircraft in China in 2006, and Rosanvallon said he expects the country's rapid expansion to continue for at least the next 20 years.
Another international name expanding its presence in the country is Bombardier Inc, the world's largest business jet manufacture by market share, which is now forecasting that 2,420 business aircraft will be delivered in China from 2012 to 2031, as the country's wealth continues to grow.
Han Zhiyu, regional vice-president of Bombardier China's business aircraft division, said: "We are confident China's market will continue to grow. Products are already in short supply right now."
Bombardier had delivered 87 business aircraft in China by the end of November, and Chinese consumers have to wait for more than two years for the delivery of one of its Global Express aircraft, Han said.
According to a recent report on the global jet market over the last 21 years, published by the system supplier Honeywell (China) Co Ltd, competition in China's aircraft manufacturing industry is going to get a lot tougher.
But Rishiraj Singh, the director of business and general aviation for Asia Pacific and China at Honeywell, said he considers that a good thing, because with it comes a large variety of models.
Singh said he expects the business jet market in Chinese mainland to increase from the current 160 per year to more than 500 in the next five to seven years.
"Chinese buyers now prefer business jets with larger cabins, which fly at higher speeds and longer," said Singh.
He added that Chinese buyers are realizing that owning a business jet amounts to more than having a luxury. It is a business decision which benefits companies.
Although the demand for business jets slowed this year due to the struggling global economy, experts view it as a long-term growth success and expect more domestic jet manufacturers to start up in the coming years.
By the end of 2011, China had nine business jets operators, according to the Civil Aviation Administration of China.
Deer Jet Co Ltd, the country's largest, said growth hit 48 percent in 2009, but it will slow to around 20 percent this year.
"But demand from the mining, commercial real estate and manufacturing industries is still strong enough to support the operation," said Li Jiang, Deer sales director.
According to industry insiders, as many as 48 operators are preparing to start business this year, but the failure rate could be high.
Some Chinese business jet operations have closed, even before their first aircrafts were built or delivered.
"No more than 20 operators will survive in this market," said Gao Yuanyang, director of the General Aviation Industry Research Center of Beihang University.
"Any successful operator needs a fleet of at least 15 aircraft."