- There was a 12 per cent year-on-year drop in business jet flight hours in China last year, according to WingX, as the country's wealthy elites tighten their belts amid economic slowdown
- Japan is the current destination of choice for China's richest travellers, as Tokyo prepares to host the 2020 Summer Olympics
China's private jet market took a beating in 2019, a sign that business confidence among the country's wealthy elites has faded sharply as the trade war and economic slowdown dampened enthusiasm for big ticket purchases and spending.
There was a 12 per cent year-on-year drop in business jet flight hours in China last year, according to WingX, a data analytics firm focused on the business jet industry. The firm tracked approximately 10,000 flights on 953 business jets, conducted by 264 operators.
Richard Koe, managing director of WingX, cited the impact of the US-China trade war and resulting slowdown as key reasons for the decline, as well as a continued lack of infrastructure and qualified personnel within China.
China's young rich entrepreneurs opt to rent private jets instead of owning one
In last year's Billionaire Report, PwC and UBS said that Chinese billionaires' net worth declined by 12.3 per cent in 2018, after years of stellar growth. The number of Chinese billionaires fell by 48 to 325.
Buffeted by the trade war, wealth became more volatile, leading to uncertainty. In the previous five years, China's billionaires had more than doubled their net worth.
Prices of business jets are likely to come down, as owners now finding they can no longer afford them are putting their planes up for sale, creating a buyer's market.
It is a trend that may be seen globally. The Jetcraft five-year market forecast suggested that total sales of new business jets would be flat until 2023. Ironically, that means charter prices could rise, as charter jet operators sell off their aircraft, effectively taking them out of the market.
Koe said that the resale of private jets in China resulted in these planes being sent out of the country, typically to the US.
Hong Kong's richest weather worst political crisis in decades to emerge richer
"We do not expect strong growth in 2020, although we do anticipate some improvement in activity as new jets are delivered into the regional fleet," Koe said.
Nonetheless, a growing desire by China's ultra rich to fly to the latest hot destinations should keep remaining charter companies busy. Serena Lui, charter services manager with Asia Sky Group, said the growing number of Chinese luxury concierge companies and private clubs offering business jet charter has boosted personal use of private planes.
Vistajet, a global private jet-chartering company, reported a 14 per cent rise in flight hours in and out of China in the third quarter of 2019. Ian Moore, chief commercial officer for Vistajet, said that as Chinese clients continue to venture further afield, global operators like Vistajet would benefit against local charter companies. China, Moore said, had experienced an "overabundance of enthusiasm", with too many jets bought ahead of market demand.
Here's why the ultra-rich splash out on private jet travel
With the Lunar New Year approaching, China's richest people will again start chartering private planes to take them away from it all. According to private jet charter companies, Japan is the current fashionable choice for China's richest travellers, as it prepares to host the 2020 Olympics.
Lui said the new top spots among China's private jet clients are Hainan, Japan, Thailand and the Maldives.
Chou agrees that Japan is now among the hottest destinations at the Lunar New Year for private jet charterers, along with Phuket and Koh Samui. Bangkok and Seoul, which used to be popular for shopping and dining, have declined in popularity as China's mega rich focus on experiential travel.
"Long-haul flights and farther destinations are becoming more popular among Chinese private jet clients during summer and Christmas holidays," said Chou. "Cape Town in South Africa, Male in Maldives, Bhutan, Papua New Guinea, Nha Trang and Helsinki, are emerging as destinations in the Chinese private jet chartering market. Those cities offer our clients a blend of culture, history and spectacular scenery."
"Apart from business travel, we see more clients in China flying privately for leisure travel.
"Event agencies charter private jets when arranging concert tours for their artists; (some) fly to cities to join special events like the Tokyo Olympics."
She added that Chinese clients were now using private jet charters to celebrate anniversaries, holiday with parents, or even just fly privately with their pets.
Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
