Story ID: 767
Deer Jet Head Sees Improvement Ahead
By: Curt Epstein
Caption: In Geneva celebrating being named the world’s first VIP 787 operator Deer Jet chairman and CEO Zhang Peng discussed the state of business aviation in China
Word Count: 710
While the Chinese business aviation market has been flat over the past two years, there are definite signs of increasing activity, according to Zhang Peng, chairman and president of Deer Jet, China’s oldest and largest business aviation company. In a conversation here at EBACE, he noted the aviation services provider has seen a significant uptick in utilization over the first quarter of the year. He predicts this year will be better than 2015, and expects 2017 to improve even more.

Though Deer Jet is involved in virtually all aspects of business aviation in China–from operating the country’s largest network of FBOs, to a maintenance joint venture with Gulfstream–Zhang said the most important segment of the company’s business is its aircraft management business in mainland China. Between its two AOCs (Deer Jet Beijing and Deer Jet Shanghai), it operates approximately 75 aircraft. A separate AOC for Hong Kong Jet adds another 25 aircraft. Of its mainland-based aircraft, the company makes 30 to 40 flights a day, more than half of them to international destinations, Zhang told AIN.

The company made big news here at EBACE when it was announced that it would operate the world’s first VIP Boeing 787, which Zhang described as the pearl on Deer Jet’s crown. “We are very proud to be the future operator of this 787 VIP aircraft, and we are ready to take delivery of this aircraft on behalf of our client,” said Zhang, noting the level of trust that his company has earned. “This aircraft is worth more than $200 million. If they don’t believe in you, who would give you such a huge asset to manage?”

The client will allow Deer Jet to offer the aircraft for charter service, and the company is considering using it in elite bespoke destination tours, in conjunction with sister-HNA Group company Caissa Touristic, one of China’s largest tourism companies. “I think that will be the future business that Deer Jet will focus on,” explained Zhang. “Business aviation plus tourism, I think that is a very new concept.”

While some outside China may lament the slow pace of development regarding business aviation, there is perhaps no company with a better perspective on its evolution than Deer Jet. “We are a window into the history of Chinese business aviation,” Zhang told AIN. “We developed all the policies, all the regulations with the government to support the whole industry. From our past 20 years’ experience we can say the policy, the infrastructure, has been improved significantly.”

Even more changes are ahead with the recently announced plans for general aviation policy by China’s State Council. Stating that general aviation will be the next engine to drive the Chinese economy, and equating the importance of GA with that of commercial aviation, the government announced an expansive series of reforms including the mandate for an additional 300 GA airports in the country by 2020.

In order to foster development of the industry, the government has also made it easier for business aviation companies to be established. Formerly it took two years of government supervision after a company was established, before it could be granted an AOC, but that lengthy waiting period has now gone away. Also eliminated was the requirement that in order to establish a general aviation company, it had to own two aircraft. Now one, even if leased, will suffice.  

“I think these are positive signs for the market, because that shows the government will give the industry more room to expand, so with this policy signal, I think more and more parties will get involved in the business aviation industry,” Zhang told AIN. “This is good for the client as this will improve the service quality for the whole industry. If you do not have good quality service you will have to depart from the market.” While he noted the increased competition could have some impact on Deer Jet’s business, Zhang is confident that the company’s reputation and its more than two decades of experience will still allow it to shine above its competition. “[We are] like NetJets in the U.S. A new small company cannot give a challenge to NetJets,” he noted.