Story ID: 356
Bizav Seeing Shift Toward Southeast Asia
By: Kerry Lynch
Caption: Business jet makers have expansive plans to grow in Asia-Pacific as Southeast Asia prepares for the rebound, leaders say.
Word Count: 1077
With an ongoing malaise in the Chinese market, the center of business aviation activity is shifting toward Southeast Asia, business aviation leaders agree.

“The center of the universe [in the Asia-Pacific region], as far as business aviation, certainly used to be China. The dollars and the units going into China made it the most significant market. But that was then and this is now, and it's just not that way at the moment,” said Jeffrey Lowe, CEO for aircraft brokerage and consultancy Asian Sky Group/Asian Sky Media.

All of the preowned transactions he has seen lately involve aircraft selling out of China, he said, adding that economic, political, and Covid-19 pressures have all contributed to the shift. “China just isn’t firing on all cylinders right at the moment,” added Lowe.

Instead, the market is growing in Southeast Asia, he explained, noting a lot of business in Malaysia, Thailand, and Singapore along with some increase in interest in Vietnam. Meanwhile, South Korea and Australia have become strong markets for missionized and government programs.

He pointed to investments that have poured into developing Seletar Airport and the surrounding region in Singapore into an aviation hub, bringing most of the OEMs, as well as major suppliers and MROs. “It’s developed itself into a great, great hub for Southeast Asia,” he said. But, he added, places such as Kuala Lumpur and Subang in Malaysia also have seen significant investment.

Such investments will better position the region once the pandemic fully lifts, he said.

In fact, Lowe believes the slowdown caused by the pandemic has given organizations the opportunity to evaluate what they need to do to prepare for when the market bounces back, including investing in areas where they might not have done so before.

Still, in Asia the market hasn’t yet seen the same bounce as in North America. “That’s because every flight is an international flight out here," said Lowe. "And so we're still waiting for Asia to open up. But everyone expects that when it does, we’ll see that boom that the U.S. is seeing at the moment and they’re getting themselves ready for that.”

Business aviation has found a home across this vast and diverse region, concurred Rolland Vincent, director and creator of JetNet iQ and president of Rolland Vincent Associates. “Service providers are investing for the long term to provide customers with local MRO solutions," he said. "In many ways, Asia Pacific remains the frontier for business aviation.”

Vincent noted that the fleet has grown from a tiny base just 15 to 20 years ago to 1,248 jets at the end of December. JetNet numbers reflect the decline in China: the fleet has shrunk some 15 percent over the past five years to 370 jets.

Even so, Greater China, including Hong Kong and Macau, remains the single largest home for based business aircraft, he noted. JetNet reported that Greater China still took 25 percent of the estimated 36 new business jets delivered into the Asia-Pacific region. Lowe added that while he is encouraged about the Southeast Asian market, China will remain a key market in the region just because of its size and wealth generation. “It’s just going through a bad patch,” he stressed.

With the distances required in Southeast Asia, ultra-long-range aircraft are still dominating in deliveries. The Gulfstream G650ER accounted for 36 percent of the deliveries and the Bombardier Global 7500 represented another 17 percent.  Large-cabin aircraft, from the Dassault Falcon 2000 and Bombardier Challenger 600 series on up, accounted for 53 percent of the installed base in Asia-Pacific, according to JetNet Numbers.

Lowe sees the trend continuing as business aircraft in the region not only fly longer distances, they typically carry more people who bring along more baggage.

The potential for growth is so important that Dassault planned to bring a sizeable contingent to Singapore. With a growing fleet in Asia-Pacific that has topped 100, according to JetNet numbers as of December 31, Dassault eyes a market that favors large cabins as it works to bring its Falcon 6X and 10X to market.

Dassault is displaying a full-scale mockup of its Falcon 6X in Singapore as it nears service entry. On pace for certification by the end of the year, the 5,500-nm 6X will feature the widest cabin of any purpose-built business jet.

The first production 6X (S/N 5) arrived at Falcon’s completion center in Little Rock, Arkansas, in late January. Dassault said teams there have prepared for months for the arrival to ensure an accelerated completion and delivery schedule with processes to enable “one-shot installations” on interiors.  

Dassault has three 6X aircraft in flight testing and plans to fly a fourth equipped with a full interior at the end of the first quarter. That model will fly globally to test the maturity of aircraft systems.

In addition to the mockup, Dassault brought to Singapore its Falcon 8X with a new interior and a Falcon 2000LXS. The French airframer further planned to provide a preview of its 7,500-nm Falcon 10X. Unveiled in May and set to enter service in the middle of the decade, the 10X also will become Dassault's largest, longest-range Falcon yet.

Underscoring its aspirations for the Asia-Pacific region, Dassault’s ExecuJet MRO Services in December revealed plans to build its own 144,000-sq-ft maintenance facility at Subang Airport, replacing the 64,000 sq ft of leased facilities that it currently operates.  To encompass 125,000 sq ft of hangar space and about 19,000 sq ft of office and shop space, the new facilities will be able to accommodate the long-range jets so prevalent in the region

While Bombardier pulled out of the Singapore Airshow over pandemic concerns, it too harbors plans in the region to unveil its service center expansion in Singapore and open a new 50,000-sq-ft facility in Australia this year.

To open shortly, the expansion at Seletar Aerospace Park will result in a 430,000-sq-ft (40,000-sq-m) facility and include a 37,000-sq-ft full-service paint facility, a nearly 10,000-sq-ft integrated parts depot, and the addition of more than $15 million in parts inventory.

The expansion comes as Bombardier remains upbeat over prospects for the region. “Over the next 12 months, we see demand intensifying to levels we have not seen since the pre-2008 era,” a Bombardier spokesperson told AIN.