The Asia-Pacific region witnessed an uptick in business aviation market mood and intentions following a dismal first half of 2023, according to Asian Sky Group (ASG). Market optimism rebounded by between 10 percent and 20 percent in various parts of the region in the second half and “the tide has turned,” wrote Jeffrey Lowe, in the recently released Asian Sky Quarterly report.
Lowe, an owner and director of ASG, painted a grim picture for the first half with 27 percent of surveyed people in the region feeling the economic situation would only get worse (this was a 14 percent surge from 2022).
“When you don’t have a great outlook for the future, you generally don’t go out and buy a corporate jet,” he said. Further in the period, the number of operators reporting reduced flying jumped from 10 percent to 26 percent. “That big explosion in business jet flying that many other regions of the world didn’t seem to be happening yet in Asia, at least through the first six months of 2023.”
But momentum in the travel and retail sectors and a 5 percent general improvement in the economic situation throughout the region contributed to the bounce in optimism. Lowe did caution, though, that each region has a different economy, and two of the “bellwether” regions—China and India—diverged in their momentum.
The business jet fleet in India grew by 0.7 percent in 2021 and 7.2 percent in 2022, while contracting in China by 1.7 percent and 11.2 percent, respectively. Lowe added China has lost about a quarter of its business jet fleet over the past two years, with aircraft sold elsewhere due to Covid restrictions, political sentiment, or economic slowdown. While India moved up to the [region's] number two business jet market in the first half, Chia was dead last.”
In the third quarter, only 6 percent of Indian respondents felt conditions might worsen, the lowest mark since 2019 and better than the 23 percent across Asia-Pacific. Traffic in India particularly ticked up in August and September. Positivity in China has not yet filtered into purchase intentions but has ticked up on the economic optimism results.
Optimism generally rose from 73 percent to 77 percent throughout the region. Southeast and Northeast Asia were the only subregions to experience an economic decline, from 83 percent to 72 percent.
ASG noted that an increasing number of businesses relocated to Southeast Asia in particular and were more vulnerable to soft demand for manufactured products, adverse weather, and reduced agricultural harvests. Even so, Singapore leads the region in flight activity given the increased number of foreign businesses there.
Some 37.7 percent of respondents region-wide were interested in purchasing preowned aircraft, a number partly attributed to the lack of available new aircraft. Large aircraft continue to be the favored category in China, the Middle East, and North Africa. Meanwhile, nearly half of the respondents anticipate chartering an aircraft over the next three years.