Charter Report 2023

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According to Lau, that nagging doubt was unfounded, as not only
have the steady stream of users that were first attracted to business
aviation stuck around, but the numbers have swelled since China
opened its borders again in early 2023.
But whilst Lau paints a rosy picture of the Chinese charter market,
she also points out that the increase in charter users has brought
with it an unforeseen problem, saying that there aren’t enough
aircraft to satisfy the country’s demand for charter flights.
“You’ve seen the travel patterns since January this year [when
China opened its borders], it’s been crazy, people have been going
everywhere,” says Lau. “But there aren’t enough aircraft.”
Lau is partly referring to the number of aircraft that have left the
Greater China business jet fleet over the past year, which, according
to Asian Sky Group’s 2022 Business Jet Fleet Report, declined by as
much as 15% in 2022.
“Travel throughout Asia-Pacific has been strong, and travel to
Europe and the US has been stronger than before. Japan is a very
popular destination, and inside China. It’s just that we don’t have
enough aircraft.”
We have a self-owned Falcon 7X
that we have leased to another
company, and the operator just
told me that last month the aircraft
flew 100 hours. That’s how strong
the demand is.”
Lau also says that she’s noticed a shift towards charter from those
owners that previously had their own aircraft but decided to dispose
of them. These days she says that there is more of a trend towards
charter, or even long-term leasing, but that there just aren’t enough
aircraft available to satisfy the demand for charter.
“You have to look at the overall economic cycle of Europe, the US and
China. Because with interest rates rising for the past year or so in the
US, everyone is waiting for the point where there is a sharp drop in
the economic cycle,” says Lau. “Once that happens there will probably
be more aircraft available on the market at a very discounted value. I
think the more mature clients are waiting for that moment.”
Another part of the reason that people are moving towards charter,
especially in China, is the current long lead times that it takes
between ordering a new aircraft and actually taking delivery of it,
with Lau saying that for new aircraft types especially the lead times
could be as long as two to three years.
“People are kind of in a wait and see period at the moment. But
some of them that are having very intensive travel demands will
buy regardless.”
With more people chartering, and Sino Jet possibly in the market
for new aircraft, the company has begun to explore more ways of
introducing what it likes to call ‘end -to-end’ travel. The company
already owns a number of FBOs across China, with the most recent
one opening up in Chengdu, but Sino Jet is already looking towards
the future, and how it can integrate the next generation of eVTOL
(Electric Takeoff and Landing) vehicles into its offerings.
As such, the company has a set up a division that has acquired 100
eVTOLs from Chinese manufacturer Aerofugia. The AE200 model
that the company has acquired is planned to accommodate up to
four passengers and can travel up to 300km.
Although Sino Jet’s eVTOL division is still working out the finer
details of what it plans to do with the eVTOLs once they arrive, it is
likely that the company will base the aircraft at its FBO locations and
fly them to and from the nearest locations that it can, to pick up and
drop off its clients that have flown into, or will fly out of, its FBOs.
This will help the company ingrain itself deeper into the travel plans
of its clients, and, help it offer a more complete end-to-end travel
solutions that its competitors can’t, initially at least, compete with.
“That puts us in a situation where we might have to, perhaps, raise
money to buy more aircraft to service our clients,” says Lau. “Or we
could just bring in some outside resources and work with some industry
peers to get the fleet adequately supplied for this part of the world.”
Overall, Lau says that she can only see charter demand increasing in
the region, whilst on the flip side she sees the number of new aircraft
acquisitions falling, especially by those that previously brought
aircraft for their own, or their own company’s usage.
ASIA-PACIFIC CHARTER REPORT 2023 | 18