ASG-ASIA-PACIFIC-Business-Jet-Fleet-Report-YE2014-EN
GREATER CHINA GREATER CHINA – MARKET TRENDS In the context of the Asia Pacific region, not too surprisingly due to the dominance of the China market, the Greater China business jet fleet at the end of 2014 represents the lion’s share of the installed fleet in the Asia- Pacific region with 59% of the aircraft (439 in total). Individually, China represents 40% of the Asia Pacific fleet, followed by Hong Kong with 15%, Taiwan 2% and Macau 1%. Compared to year-end 2013 however, the Greater China fleet grew only 15.5% in 2014 pulled down by lower fleet growth in China specifically and consequently, the Greater China fleet portion of the total Asia Pacific fleet remained unchanged 2013 to 2014. From an OEM’s perspective and whether their fortunes will rise or fall in the Asia Pacific region in the near future, different manufacturers have very different dependencies on the Greater China market. Keeping in mind that the Greater China market is very much a large cabin / long range market, it is not too surprising that Hawker and Cessna have just over a third (32% and 37%) of their Asia Pacific fleet based in Greater China versus 83%, 72%, 72% and 64% for Airbus, Dassault, Gulfstream and Bombardier respectively. Of note are Embraer and Boeing (57% and 39%), with Embraer having a large fleet in Indonesia to counter balance Greater China, and Boeing doing very well at placing aircraft throughout the Asia Pacific region. Year-End 2014 Review In ASG’s 2013 year-end business jet fleet report, it was expected that the Greater China market would grow at 20% and reach 445 aircraft by the end of 2014. ASG also highlighted a number of market drivers that could end up influencing these numbers. These market drivers were: ● Austerity measures put in place by the Central Government in Beijing ● The introduction of a more clearly defined tax structure for business jets registered in China ● Operational and infrastructure issues like parking constraints in Hong Kong To these we can also now add: ● Spending fears linked to the on-going corruption crackdown by the Central Government ● The slowing pace of GDP growth in China In line with ASG’s predictions, market drivers did exactly as expected and 2014 saw growth in the Greater China market of only 15.5% - a drop of 5% from the growth rate achieved from 2012 to 2013. The net number of aircraft (new deliveries plus pre-owned additions minus deletions from the market) added to Greater China in 2014 was 59 in total versus 64 in 2013 and over 100 in 2012. The Greater China market is very much in decline. When breaking the 2013 net numbers down even further versus 2014, new aircraft deliveries held up through 2014 (+21%) and even deletions decreased (-17%). The big change was therefore in the pre-owned deliveries. In 2013, pre-owned aircraft represented almost half the additions to the Greater China fleet. In 2014 this number was just 28%. In 2013 there was almost an insatiable, immediate demand for aircraft in Greater China. The only way to meet this requirement was through more pre-owned aircraft sales, with a vast majority of these sales being relatively new, i.e. recently delivered & low time pre-owned aircraft. With the austerity measures and corruption crackdown gaining steam through the course of 2014 however, buyer demand and sentiment declined, directly impacting pre-owned aircraft sales. 54 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014
GREATER CHINA Winners and Losers in 2014 If we look at China, Hong Kong, Taiwan and Macau individually, the net business jet fleet growth for 2014 in China and Hong Kong were almost the same: 16.0% versus 16.3%. This represents a considerable change in the growth rate of these 2 key markets. In 2013, China’s fleet grew at 26.7% and Hong Kong at a mere 5.4%. This change in fortunes is directly attributable to the market drivers outlined above. Examining Greater China’s net growth further, in the dominating large size category and up, there were only two OEMs that added more aircraft in 2014 than in 2013. These were Boeing and Embraer, recognizing though that these OEMs also have amongst the smallest market shares in Greater China. All the other OEMs – Gulfstream, Bombardier, Falcon and Airbus added less aircraft in 2014 than in 2013. On the important topic of new aircraft deliveries, Gulfstream, Bombardier, Cessna and Boeing all increased their deliveries of new aircraft into Greater China in 2014 (however, see “Forecast for 2015”). All the other manufacturers either saw flat growth or delivered fewer new aircraft than in 2013. The top 4 aircraft models delivered in 2014 were the G550, the G450, Falcon 7X and Global 6000. For pre-owned aircraft deliveries, only Falcon and Hawker saw increases and only Gulfstream saw their deletions increase. Of note is also the small 2014 net growth in the Light and Very Light size categories. This is directly attributable to the opening up of the lower airspace across China which is in turn encouraged growth in the flight training sector. The only category which has seen a declining growth year on year 2012 through 2014 is the Medium size category. NET FLEET GROWTH 2012-2014 Per Aircraft Base 297 256 2012 2013 2014 202 93 98 114 14 11 11 7 15 17 China Hong Kong Macau Taiwan ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 55
- Page 4 and 5: 15 17 Taiwan +13% ASIA PACIFIC BUSI
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- Page 30 and 31: Malaysia 38% of the Total Malaysia
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GREATER CHINA<br />
Winners and Losers in 2014<br />
If we look at China, Hong Kong, Taiwan and Macau individually, the net business jet fleet growth for 2014 in China<br />
and Hong Kong were almost the same: 16.0% versus 16.3%. This represents a considerable change in the growth<br />
rate of these 2 key markets. In 2013, China’s fleet grew at 26.7% and Hong Kong at a mere 5.4%. This change in<br />
fortunes is directly attributable to the market drivers outlined above.<br />
Examining Greater China’s net growth further, in the dominating large size category and up, there were only two<br />
OEMs that added more aircraft in 2014 than in 2013. These were Boeing and Embraer, recognizing though that<br />
these OEMs also have amongst the smallest market shares in Greater China. All the other OEMs – Gulfstream,<br />
Bombardier, Falcon and Airbus added less aircraft in 2014 than in 2013.<br />
On the important topic of new aircraft deliveries, Gulfstream, Bombardier, Cessna and Boeing all increased their<br />
deliveries of new aircraft into Greater China in 2014 (however, see “Forecast for 2015”). All the other manufacturers<br />
either saw flat growth or delivered fewer new aircraft than in 2013. The top 4 aircraft models delivered in 2014 were<br />
the G550, the G450, Falcon 7X and Global 6000.<br />
For pre-owned aircraft deliveries, only Falcon and Hawker saw increases and only Gulfstream saw their deletions<br />
increase.<br />
Of note is also the small 2014 net growth in the Light and Very Light size categories. This is directly attributable to<br />
the opening up of the lower airspace across China which is in turn encouraged growth in the flight training sector.<br />
The only category which has seen a declining growth year on year 2012 through 2014 is the Medium size category.<br />
NET FLEET GROWTH 2012-2014<br />
Per Aircraft Base<br />
297<br />
256<br />
2012 2013 2014<br />
202<br />
93 98 114 14 11 11 7<br />
15 17<br />
China Hong Kong Macau Taiwan<br />
<strong>ASIA</strong> <strong>PACIFIC</strong> BUSINESS JET FLEET REPORT YEAR <strong>EN</strong>D 2014<br />
55
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