Economy

Chinese business travel set to take off

By James Pomfret and Alison Leung (China Daily/Agencies)
Updated: 2011-03-12 09:50

The rising number of billionaires may be a boon to aircraft makers

HONG KONG - Flanked by an entourage of assistants and advisers, the Chinese mining tycoon Lian Guangming flitted from one luxury jet to another at the Asian Aerospace Expo in Hong Kong.

"Not bad," said Lian, from the Inner Mongolia autonomous region as he emerged from the plush, leather and wood paneled interior of a $55 million Bombardier Global Express XRS earlier this week.

"If I like something, I'll buy it."

A Gulfstream G450 (R) business jet on display at the Asian Aerospace Expo in Hong Kong. [Photo/Agencies]?

With the aviation industry now booming in the world's second-largest economy, China's passengers are expected to account for around a quarter of the world's 800 million new travelers by 2014. Dozens of new airports are under construction, and the executive jet market is expected to ride the crest of this wave.

Forbes' latest global rich list showed the number of Chinese billionaires has doubled over the past year to 115, the first time any country outside the United States, which has 413 billionaires, has had more than 100.

However, China only has around 200 private aircraft, according to official estimates, far fewer than the 11,000 in the United States.

US executives, including those at the government-owned General Motors Co, are now getting back on corporate planes as the economy slowly recovers after the global financial crisis.

Billionaire Warren Buffett's NetJets Inc has recently placed an order for up to 120 jets from Bombardier Inc in a deal that could worth more than $6.7 billion.

Embraer Executive Jets SA forecasts a global market of more than 10,000 business jets, worth $210 billion in the next 10 years, with China expected to take the lion's share.

"It's very hard to know who will buy the next jet. They just pop out," said Daniel Amtmann, director of business development in China for Cessna Aircraft Co, on the new wave of Chinese buyers.

"It's a concept market," he added, referring to one with changing trends and styles.

Many of the world's leading executive jet makers - Textron Inc's Cessna unit, General Dynamics Corp's Gulfstream, Embraer, Bombardier Inc and Hawker Beechcraft Corp - flew their planes into Hong Kong for this week's expo with sales people, including Mandarin-speaking Westerners, especially targeting Chinese buyers.

"We're all here," said Lian, the tycoon who has interests in mining, finance, property and aviation, and was shopping for two jets for his aviation company.

"Some of us are ready to buy planes and others are still searching and researching. But I can say that the spring of (private) flights in China has arrived," he told Reuters.

In the cabin of a Gulfstream jet during a 90-minute demonstration flight over Hong Kong, guests peered through portholes at the city's famous harbor and skyscrapers.

Gulfstream Aerospace senior vice-president Roger Sperry, their host for the trip, was telling reporters that China is relaxing some of its air restrictions.

Long standing hurdles, including tight airspace and air traffic control regulations, along with sometimes rudimentary corporate jet services in Chinese airports, were being addressed, he said.

"We can get approval, for example, to fly to Beijing within three days for airway permission," said Sperry, explaining the time had been cut from around seven days previously.

Back at the Expo, Jean Michel Jacob, the head of global sales for Dassault Falcon Jet Corp said Chinese demand will boom, with China sales expected to go from around 6 percent of total sales to around 20 percent in five years.

Standing beside a $52 million Falcon 7X jet, Jacob said his longer-range jets should appeal to globetrotting Chinese billionaires with overseas interests.

Related readings:  Aviation firms look to take off in China  Chinese and US companies to develop C919 power system   Life-size model of C919 passenger jet at Beijing expo   Chinese billionaires fuel spike on Forbes' rich list

David Velupillai, marketing chief for executive and private aviation at Airbus SAS, eased back on a cream leather seat in the spacious belly of a $65 million "A318 Elite" corporate jet as he took up the theme of China's new awareness about the needs of corporate travelers.

The Chinese government understands the importance of rapid overflight permission, and of having a good ground-based infrastructure, including lounges and maintenance centers.

"And of course if large companies are growing their business then that can literally have an impact on a country's economy," Velupillai told Reuters.

"For now, Airbus has a relatively modest sales target of five corporate jets in China each year, though cabins customized with Chinese design elements, including a round dining table, Chinese screens and auspicious reds and golds, will help drive sales," Velupillai said.

"In this particular cabin concept we also have the ability to do a karaoke bar," he said. "A billionaire who's already got a jet aspires to have a bigger one."

Reuters