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Friday, Apr 25, 2014

Travel, Asia

China to drive demand for corporate jets

The Business Times | Nisha Ramchandani | Friday, Apr 25, 2014

ACJ319 Elegance: Unlike the current fully customisable version, Elegance will offer a range of lounge, office, dining and conference modules for customers to choose from

SINGAPORE - The Asia-Pacific region is expected to account for a third of Airbus's corporate jet orders, driven largely by demand from China.

"We see a need for about five Airbus corporate jets a year in Asia-Pacific. A lot of those would be for China," said David Velupillai, marketing director for Airbus Corporate Jets (ACJ).

Today, about 25 of the 170 or so Airbus corporate jets which have been sold so far are based in the region. Twenty of those are in China alone.

ACJ is the business jet unit of aircraft manufacturer Airbus, which is more popularly known for commercial aircraft - such as the double-decker A380 - used by airlines globally.

"China has the highest GDP growth. It's a relatively new market for corporate jets so we see China . . . as the fastest-growing market at the moment for business jets," he added.

According to a study conducted by UK-based Ledbury Research together with Airbus, the number of billionaires in China is expected to more than double from 470 in 2012 to about 1,040 in 2017. This would put the populous nation on a par with the US in terms of the number of billionaires by 2017.

Worldwide, ACJ is keen to sell a total of 15 business jets a year, with the remaining aircraft likely to go to markets such as the Middle East, North America, Europe and Africa. Buyers tend to be high net worth individuals, governments as well as companies.

The European plane-maker delivered about six corporate jets last year as the uncertain global economy hit demand.

"The last few years have been challenging for everybody," said Mr Velupillai.

Last week, the plane-maker announced that it was launching a new, simplified version of its most popular make of corporate jet dubbed the ACJ319 Elegance, which Mr Velupillai reckons could be of interest to the Chinese market. Elegance is priced under US$80 million, while the ACJ319 typically goes for around US$87 million.

Unlike the current fully customisable version, Elegance will offer a range of lounge, office, dining and conference modules for customers to choose from, which will allow them to save time and effort in designing the cabin, Airbus said.

Down the line, it will also make upgrading the cabin easier by allowing the existing modules to be replaced by different ones.

Cabin outfitting of the Elegance model will be carried out by its Airbus Corporate Jet Centre subsidiary in Toulouse. Manufacturing of its ACJ318 and ACJ319 corporate jets are mostly done in Hamburg.

nishar@sph.com.sg
@Nisha_BT

This article was published on April 24 in The Business Times.

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