Story ID: 307 AsBAA_revised_CA.doc
AsBAA Gradually Growing in Influence and Effectiveness
By: Ian Sheppard
Caption: The Asian Business Aviation Association starts to make its mark and has shown that it can get things done to help the interests of business aviation.
Word Count: 1769
A couple of years ago, the Asian Business Aviation Association (AsBAA) was little more than a name, with a board who did little more than talk. That, however, has all changed over the past 18 months—perhaps jolted into action by the need to respond to various obstacles to business aviation growth in the region.

Charlie Mularski, chairman of AsBAA, told AIN in an interview last month that the association’s recent success started with it being more organized and focused. This, started with the establishment of a strategy based on the following three core sets of goal: the first, to explain the value of business aviation to the media, politicians and regulators and to start to overcome negative perceptions of the sector; the second, to act as a “networking platform” for aviation and non-aviation parties; and the third, to “enhance the footprint of the grass roots membership.”

“We’ve got a lot more traction getting people to help, volunteering outside their working hours. We only have two employees,” said Mularski. “The brand image of the association has improved, too, as we’ve worked on issues rather than just complaining and being a social club.”

An example of how it has attained “more traction and recognition with regulators” was AsBAA’s involvement with an issue in Indonesia. “We were instrumental along with IBAC [International Business Aviation Council] in pushing Indonesia on [operating regulation] PM66 [2015]. We had a great outcome last year with the involvement of our members, and got the government to seriously look at the issues and impact—for example the limitation on travel for foreign investors who wanted to look at their plants and factories.”

Another example has been in Hong Kong where AsBAA has been very active to improve the availability of slots at an airport that is working at more than 95 percent of capacity already. “We’ve been working with the authorities to maximize the availability of slots for our operators,” said Mularski. “The airlines and cargo are taking more and more slots, but more than 140 business aircraft have Hong Kong as their home base; that’s more than Teterboro [just outside New York] and one of the highest concentrations in the world.”

For the future Mularski said the vision is to be able to treat Macao/Hong Kong/Zhuhai as one area for aviation purposes. This would build on the initiative whereby aircraft can already use Zhuhai [in mainland China] as a temporary base for parking, although approval takes some hours. “We hope to get more volume there,” he said, noting that when the new Hong Kong-Zhuhai-Macau bridge/tunnel opens, it will help make the case for aviation too.

Additionally, he said the first commercial helicopter flight between Hong Kong and Zhuhai showed the Hong Kong government regular operations on this sector could be achieved. This new operation was flown by Sky Shuttle, which already flew to Macau and Shenzhen.

“That’s in progress—but we’ve had great feedback from the Hong Kong legislative council, who are all aligned and willing to help,” said Mularski. AsBAA is also campaigning to keep the helipad at the Kai Tak site of Hong Kong’s former international airport. The city center site is being targeted by real estate developers, although being adjacent to the cruise liner terminal that runs along the edge of the old runway, could be to its advantage in terms of making the case for continued helicopter operations there.

Membership Growth

“Our membership has grown 20 percent year-over-year, and we’re striving to add a lot more in 2017,” said Mularski, who explained that AsBAA has also added more layers of membership for small companies and individuals to join, and to bring in service providers such as brokers, law firms and insurance companies.

“A few [aircraft] owners have also asked how they can help,” he added. “They don’t want to be in the newspapers, though.” AsBAA, itself, is keen to engage with the media, however, both within aviation and the mainstream press. “We have been very busy doing media articles and editorials. Our biggest goal with the media is to continue to convey the message of the value of business aviation. Sadly, though, reporters are usually looking for the bad news. Our goal is to turn that around.”

All the main business aircraft manufacturers are members of AsBAA. “We praise them for being fully aligned with AsBAA, and we don’t see any rivalry.” And they’ve got local people selling to locals, and all are very well in tune with market needs.”

Mularski acknowledged that AsBAA is operating to a tight budget and so is increasing the focus on fundraising to maximize the human resources. “We’re looking to have a business development person working on commission. At the moment we have one full-time staff member in China and one in Hong Kong,” he explained. “And the ultimate goal is to be able to hire a managing director as the key person for all the issues. Then we would have a lot more traction—we could triple our effectiveness and complete projects faster.”

In June, AsBAA will hold elections for a new board and Mularski is hoping to get a strong and effective roster to take the association forward.

In response to the need for AsBAA to have a broader reach around the Asia Pacific region, Mularski admitted that, “some of the guys in Southeast Asia feel a little left out, but every year ABACE attracts more companies from across Asia Pacific. We [AsBAA] have chapters in Indonesia and Malaysia and have an increasing presence in Thailand—so we’re not just focused in Hong Kong and China. But the challenge is that most individuals [active in the association] are in Hong Kong. We had a meeting in Hong Kong in December and developed our strategic plan for 2017, to focus more on the important things.”

AsBAA has close ties with other associations in the region, including in the Japan Business Aviation Association (JBAA), ABAA in Australia and the BAOA in India, while AsBAA covers from China down to Indonesia. “All of us are under IBAC—and we see each other four times a year at their meetings, sharing intelligence and best practices,” he said.

In 2017 the main focus is on facilitating cross-border low-level helicopter flying in to China. At the same time, AsBAA is more active in the Southeast Asia market, where it faces some challenges in Thailand, for example, with charter operating licenses and permission to fly routes within the country. In June, the group will hold its annual general meeting in Singapore.

The other major event of AsBAA’s year is its gala dinner and awards ceremony. Last year 300 people attended and it raised a lot of money, partly for the Orbis flying eye hospital. This year it will take place on November 10 in Hong Kong. “It’s becoming the highlight of the aviation calendar,” said Mularski.

Market Resurgence?

Overall, while business aviation activity in Asia has not stalled, the region has so far failed to generate the growth that was widely anticipated by the industry a few years ago. In China, there has clearly been an image problem associated with private aircraft ownership.

“From member comments and trends it’s clear the economic growth in China is still very strong, and we see that the market is continuing to grow,” said Mularski. “And new aircraft continue to arrive even if not at the volume of three-to-five years ago. There is less speculation [over aircraft transactions] now, and the market has normalized to match real demand.”

The midsize aircraft market in particular is strengthening, he told AIN, “and we hear from brokers that the preowned market is very strong.” However, he said buyers are putting more emphasis on “optimizing their requirements for their flying needs…we see more and more corporations looking at that, and also moving more to seeing the aircraft as a tool. So it’s all positive.”

Airspace and Airports

According to Mularski, access to low level Chinese airspace for civil aircraft is improving as long as operators confine themselves to a limited number of specific corridors. “The good news is that we’re seeing airports being built in large numbers,” he said.

However, one challenge is that the new runways tend to be below 800 meters (2,625 feet) in length, because it is so much easier to gain approval for construction with those limits, which are of little use to business aviation. However, Mularski pointed out that some of the new runways are being built with provisional approval for extensions to be added at a later date.

Overall, Mularski sees the lack of airports and capacity at hubs as being “the biggest limitation we have all across Asia. We are still confined to the big commercial airports, and all have [increasing traffic] from airlines, so the situation is going to become worse and worse.”

What about the availability of ground handling and maintenance services around Asia for business aviation? Mularski pointed to Seletar Airport in Singapore as an example of a hub of business aviation activity, and contrasted this with the limitations in Hong Kong. “Hong Kong was a hub for maintenance with Metrojet and others, but the capacity constraints have hurt its market share,” he commented.

China has a few dedicated maintenance, repair and overhaul facilities for business aircraft, but AsBAA can see a case for more to be established there. “We may also see facilities built in Thailand and Indonesia, but the challenge is that they will still be at main hubs. We also need airports where we can have parking and other services. Seletar is an exception,” Mularski. In his view, Hong Kong’s Kai Tak Airport could have continued to operate successfully had it been kept open as a dedicated business aviation gateway.

Here at Shanghai’s Hongqiao Airport, where the ABACE show is once again being staged, authorities in early March decided to limit business aviation traffic to off-peak hours, because there is so much demand from scheduled airlines. That said, Mularski said that AsBAA is more optimistic about future prospects now than it was at the time of the 2016 show. “ABACE needs to be seen as an Asian show, not just a Chinese one,” he concluded.