Story ID: 207_NetJets China.doc
NetJets China Highlights Charter And Management Services
By: James Wynbrandt
Caption: Netjets was the first international company to win approval for charter operations within China,
Word Count: 787
	The official opening of NetJets Business Aviation China (NJBAC) last October ranked among the top business aviation news developments of the past year, and here at ABACE 2015 the NetJets team is showcasing its charter and aircraft management services. NJBAC received its air operators certificate (AOC) in September from the Civil Aviation Administration of China (CAAC), allowing the company to conduct charter flights within the country, the first international company to win such approval.

A joint venture partnering U.S.-based NetJets and private Chinese investment firms Honey Capital and Fung Investments, NJBAC operates two company-owned Hawker 800XP midsize business jets from its base in Zhuhai. Though this is a new venture, Robert Molsbergen, who heads the operation, is eager to “take a little bit of the misconception out of the equation” regarding NetJets’ experience in China. Molsbergen noted that before NetJets teamed with its local partner, “Our customer base in the U.S. and in Europe, flying either with NetJets, or on aircraft we managed, or our charter clients, have been traveling to and from China [for some time].”

Molsbergen is president of Executive Jet Management (EJM), a wholly owned subsidiary of NetJets, which is itself owned by the Warren Buffett-directed Berkshire Hathaway holding company. EJM specializes in managing aircraft for business jet owners, and conducting charter operations, typically using the aircraft it manages, and has more than 200 business jets under management worldwide. Since these are the services NetJets is focusing on in China, rather than the fractional ownership program its namesake company provides in the U.S. and Europe, it makes sense that Molsbergen is at the helm of NJBAC. Nonetheless, there’s no denying that this hasn’t been an auspicious year to launch a charter operation in China, given the impact of the government’s austerity campaign and crackdown on corruption.

“We estimate about 50 to 60 percent of that market disappeared overnight, by virtue of all the charter flights being government-business driven,” Molsbergen said. At NJBAC, requests for charter price quotes remained constant but “we did notice the conversion rates were going down a little,” he said.

But NJBAC is here for the long haul, unfazed by temporary market downturns. “In terms of building out our China entity, we’re diligently executing on a very conservative business plan,” Molsbergen said.

NJBAC has no plans to augment its two Hawkers but has ramped up its management service, under the EJM China brand. “This is, quite frankly, now very much on our list to do,” Molsbergen said, “to see how we can serve owners in China, who either currently have an aircraft, or are thinking about acquiring an aircraft, and want to have the benefit of [a support] infrastructure.”

Molsbergen pointed out management fees are often offset by discounts on insurance, fuel purchases, crew training and other costs. Management companies can offer owners these savings through their bulk buying power. Additionally, revenue generated through allowing aircraft to be used for charter can help offset operating costs, making ownership more affordable. As for EJM’s credentials in this area, “We are one of the oldest aircraft management companies in the world, we are by far the largest aircraft management company in the world. With that said, we offer a very personalized service, with dedicated teams assigned to each account,” Molsbergen said. EJM also offers transparent pricing. “We only charge a management fee,” he said. “Everything else is a pure pass-through cost, so the customer knows exactly what he pays each month.”

EJM China recently brought online its first managed aircraft in the region, a Hong Kong-based Bombardier Global 6000. Aircraft owners curious about management services are welcome to visit the NetJets display (Booth P618) to learn more.

Regardless of the level of operations, charter is running smoothly, Molsbergen reported. Popular destinations include Shenzhen, Shanghai and Macao, with occasional trips to central and northern China. Most of the flights are to unrestricted airports, but when necessary, the company has been successful getting the needed permission and satisfying other requirements, though Molsbergen admitted that ability “varies on the days, exactly what airport, and what activities” are going on at the time.

Yet, in addition to government campaigns and airspace restrictions hampering activity, many potential customers in China who could afford and benefit from charter are unfamiliar with it, in theory and practice. NJBAC plans outreach efforts to counter that lack of awareness. “We are looking at joining very specific aviation organizations, and through those forums, we hope to educate the market about business aviation and the wonderful attributes it can bring to the business community and the leisure community,” Molsbergen said.