Story ID: 529_NetJetsChina.doc
NetJets Set to Start China Bizav Operations
By: Charles Alcock
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Word Count: 460
NetJets this month expects to import its first two aircraft into China in anticipation of securing a Chinese air operators certificate (AOC) around the end of the first quarter of 2014. The U.S. fractional ownership provider will base a pair of its Hawker 800 midsized jets in China in order to be able to offer private charter services to local clients.

The main business model for Zhuhai-based NetJets-China Business Aviation Ltd. will be to provide aircraft management services. NetJets CEO Jordan Hansell told AIN that the first managed aircraft could follow soon after the AOC is issued. “One of the things that has made the Chinese government interested in us is that they can see that we’ve done it [aircraft management] elsewhere and that we’ll operate at a high standard,” he said. “It’s part of their five-year plan to develop this industry in the country and they seem to see that we can help to raise the standards there.”

NetJets’s local subsidiary, which is supported by a new sales office in Beijing, is a joint venture with a consortium of Chinese investors led by Hony Jinsi Investment Management (Beijing) Ltd. This is a subsidiary of Chinese private equity firm Hony Capital, and Fung Investments, which is owned by Dr. Victor Fung and Dr. William Fung. The new company will handle all aspects of aircraft management, including providing pilots, maintenance, hangar space, flight dispatch and scheduling.

Like other Western business aviation companies, NetJets is finding it challenging to recruit Chinese pilots for its operation. Foreign pilots can fly in China but having Chinese nationals in the cockpit gives significantly greater operational flexibility because they are required in order to land at some airports. In some instances, using a Chinese navigator can get around this problem. “This is proving to be more cumbersome than we had anticipated,” said Hansell.

Some business aviation operators have found that they have a hard time attracting pilots who find an airline career in China to be more appealing. But Hansell said NetJets has been able to lure some airline pilots in the opposite direction.

Similarly, NetJets has also had to accept that the regulatory process for establishing an operation in China takes longer than it does in other regions. “We started a management business in Europe after the Chinese one and it is already up and running,” explained Hansell. “We already have more than nine aircraft under management in Europe, where the regulators already knew us and what we do [from its NetJets Europe fractional operation]. But people tell us that, by most standards, we are moving at lightning pace in China. They [the authorities] have been very helpful.”