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Minsheng Financial Leasing and Hurun Research Institute jointly release the first China Business Aviation Special Report 2016

Time:2016-08-04 Source:China Business News (Shanghai) Pageviews: Print Font size:AAA
(Original title: Minsheng Financial Leasing and Hurun Research Institute jointly release the first China Business Aviation Special Report 2016)

In the next five years, more than 1850 people will have the potential to buy business jets and 12000 people have the potential to charter business jets in mainland China.

1. Market size of business jets
At present, there are nearly 300 corporate jets but 1420 people have the potential to buy business jets in mainland China, with demand up to 1750 jets and total value over 340 billion Yuan. In addition to the potential to buy business jets, the other people also have the demand of charter flights. Now, up to 9000 people with assets over 100 million Yuan have the potential of charter flights with the total demand for potential charter flight nearly 205 thousand hours.

2. The market forecast in the next five years
If covering the invisible wealth, up to 1850 people will have the potential to buy corporate jets in mainland China in the next five years, with the purchase demand up to 2320 corporate jets and value over 460 billion Yuan while the potential population of potential charter flights will rise to 12000 people with demand correspondingly up to nearly 270 thousand hours in the next five years.

3. Ten reasons for buying business jets
In addition to more efficient and flexible, "beauty-show” matter, privacy and peace of mind are also an important reason to buy corporate jets. Additionally, it also includes safe and reliable flight, convenience, more comfortable travel, cost-effective feature, personalized quality of life and trend follow-up.

4. Seven reasons for buying no business jet
In addition to the complicated route applications / parking procedures, it also includes the too expensive price, too high profile, civil aviation route available for the demand of travel, less understanding of corporate jets, the tendency of charter flights and image restrictions.

5. The size of super wealth creators in mainland China
If covering the hidden wealth, in Chinese mainland, there are 580 people with more than 10 billion Yuan, 970 people with over 1 billion US dollars (about 6.5 billion Yuan) , 5630 people with more than 2 billion Yuan, 78000 people with 100 million Yuan (according to the statistics of Hurun Research Institute).

When buying a business jet, the five major considerations include brands, cost performance, models, security and comfort.

Beijing with its absolute advantage becomes the domestic city of parking the most corporate jets, accounting for 35%, followed by Yangtze River Delta region (mainly in Shanghai), accounting for 25%, then the Pearl River Delta (mainly in Shenzhen), accounting for 20%. Other cities account for 20% totally.           

In mainland China, the cities with most frequent takeoff and landing of corporate jets include Beijing, Shanghai, Shenzhen and Sanya. Hong Kong, Japan, Singapore and Seoul are the cities with most frequent short takeoff and landing of corporate jets outside Chinese mainland. The four most popular round-trip routes include Beijing to Shanghai, Beijing to Shenzhen, Beijing to Hong Kong and Shanghai to Hong Kong. For the overseas cities with the most frequent long distance takeoff and landing of corporate jets, New York, Los Angeles, San Francisco, Paris, London and Sydney are far in advance.           

The time period of most frequent use of corporate jets in Chinese mainland includes Spring Festival, summer vacation, New Year's day, and Christmas Day as well as important meetings and activities such as China Entrepreneurs Forum held in Yabuli of Heilongjiang Province in February, Hong Kong Basel Arts Exhibition in April, Boao Forum for Asia and Asian Business Aviation Exhibition in February, and Summer Davos Forum in September.
           
With the long-distance route from Beijing to New York as an example, a round trip needs 30 hours, and the charter flight of ultra-range model business jet costs about 2.25 million Yuan (excluding the ground costs. reference price: 75,000 Yuan/hour). With short haul Beijing to Shanghai as example, a round trip needs 5 hours, and the charter flight of ultra-range model business jet costs about 225 thousand Yuan (excluding the ground costs. reference price: 55,000 Yuan/hour).  

According to Hurun China Rich List, up to 32 super-wealth creators have corporate jets. Among them, the super-range corporate jet is most popular, and 24 people own this type of jets; 3 people own long-range corporate jets, ranking the second; 2 people own super medium-sized business jets; and 3 people own super-large, large, and medium-sized corporate jets respectively.

The majority of owners wish to replace their corporate jets

"(On April 13, 2016, at Shanghai Asian Business Aviation Conference and Exhibition (ABACE) , Minsheng Financial Leasing and Hurun Research Institute jointly issued the first China Business Aviation Special Report 2016). The 29 pages of professional report reveals the information of corporate jets owned by the entrepreneurs of Hurun China Rich List, analyzes the market potentials of corporate jets in Chinese mainland at present and in the next 5 years, and lists five most popular business jet routes, as well as discusses the characteristic manifestation etc in the use and purchase behavior of corporate jet owners and potential owners."           

Business aviation started in the United States in 1920s and 1930s, with nearly 80 years of development history up to now. In 1995, the business aviation was in infancy in China, and it began to really develop in 2008. At present, there are nearly 300 corporate jets in Chinese mainland, 439 jets in the Greater China region, and 744 jets in Asia Pacific region. (according to the data of Minsheng Financial Leasing)
           
Hu Run, Chairman and Chief Researcher of Hurun China Rich List said: "There is a huge development potential for the business jet industry. Although there are only 300 business jets in mainland China today, in the long run, it has the capacity of reaching more than 2000 jets in the next 5 years. This time, we are very pleased to join hands with Minsheng Financial Leasing – the leader of business aviation industry to timely release the " China Business Aviation Special Report 2016 during the Asian Business Aviation Conference and Exhibition (ABACE) with great influence in the Asia Pacific and the world."           

Qiaokai, Vice President of Minsheng Financial Leasing, said: “in recent years, the corporate jet industry has developed rapidly in China. Compared with the previous years, although the growth rate is slowing in these years, it still maintains a rapid pace of development. Minsheng Financial Leasing, as the leader of Asian business aviation industry, has been always insisting on promoting the popularity of aviation culture. We hope that through the cooperation with Hurun - an authoritative research institution, we can create a new and localized business aviation culture more fitting the characteristics of Chinese market, with result of Chinese business aviation career constantly full of vigor and glory."

Eight major aspects of the report

1. The corresponding forecast on entrepreneurs and corporate jets
According to the relevant survey of Hurun Research Institute, if covering the hidden wealth, in Chinese mainland, there are 580 people with more than 10 billion Yuan, 970 people with over 1 billion US dollars (about 6.5 billion Yuan) , 5630 people with more than 2 billion Yuan, 78000 people with 100 million Yuan.

In the crowd with wealth more than 10 billion Yuan, it is expected that 50% of them have the potential to buy a business jet. If each person has an average of 1.5 jets, the total potential demand shall be about 438 corporate jets, with the average value of 320 million Yuan for each jet. In the crowd with wealth from 1 billion US dollar to 10 billion Yuan, it is expected that also 50% of them have the potential to buy a business jet. If each person has an average of 1.5 jets, the total potential demand shall be about 290 corporate jets, with the average value of 230 million Yuan for each jet. In the crowd with wealth from 2 billion Yuan to 1 billion US dollar, it is expected that 20% of them have the potential to buy a business jet. If each person has an average of 1.1 jets, the total potential demand shall be about 1,025 corporate jets, with the average value of 130 million Yuan for each jet.

In addition to crowd with the potential to buy business jets, the rest also have the demand for charter flights. In the crowd with wealth more than 10 billion Yuan, 40% of them have the potential demand of charter flights, with the demand of charter flight about 200 hours per year for each person. In the crowd with wealth more than 1 billion US dollar, also 40% of them have the potential demand of charter flights, with the demand of charter flight about 100 hours per year for each person. In the crowd with wealth more than 2 billion Yuan, 30% of them have the potential demand of charter flights, with the demand of charter flight about 50 hours per year for each person. In the crowd with wealth more than 100 million Yuan, 10% of them have the potential demand of charter flights, with the demand of charter flight about 10 hours per year for each person.

At present, there are nearly 300 corporate jets but 1420 people have the potential to buy business jets in mainland China, with demand up to 1750 jets and total value over 340 billion Yuan. In addition to the potential to buy business jets, the other people also have the demand of charter flights. Now, up to 9000 people with assets over 100 million Yuan have the potential of charter flights with the total demand for potential charter flight nearly 205 thousand hours.

The prediction of corporate jet market in the next five years: If covering the invisible wealth, up to 1850 people will have the potential to buy corporate jets in mainland China in the next five years, with the purchase demand up to 2320 corporate jets and value over 460 billion Yuan while the potential population of potential charter flights will rise to 12,000 people with demand correspondingly up to nearly 270 thousand hours in the next five years.

2. The entrepreneurs of Hurun China Rich List and their corporate jets
According to Hurun China Rich List, up to 32 super-wealth creators have corporate jets. Among them, the super-range corporate jet is most popular, and 24 people own this type of jets; 3 people own long-range corporate jets, ranking the second; 2 people own super medium-sized business jets; and 3 people own super-large, large, and medium-sized corporate jets respectively.

3. The domestic city of parking the most corporate jets
Beijing with its absolute advantage becomes, accounting for 35%, followed by Yangtze River Delta region (mainly in Shanghai), accounting for 25%, then the Pearl River Delta (mainly in Shenzhen), accounting for 20%. Other cities account for 20% totally.           

4. The cities with most frequent takeoff and landing of corporate jets
In mainland China, The cities with most frequent takeoff and landing of corporate jets include Beijing, Shanghai, Shenzhen and Sanya. Hong Kong, Japan, Singapore and Seoul are the cities with most frequent short takeoff and landing of corporate jets outside Chinese mainland. For the overseas cities with the most frequent long-range takeoff and landing of corporate jets, New York, Los Angeles, San Francisco, Paris, London and Sydney are far in advance.           

5. The time period of most frequent use of corporate jets in Chinese mainland
The time period of most frequent use of corporate jets in Chinese mainland includes Spring Festival, summer vacation, New Year's day, and Christmas Day as well as important meetings and activities such as China Entrepreneurs Forum held in Yabuli of Heilongjiang Province in February, Hong Kong Basel Arts Exhibition in April, Boao Forum for Asia and Asian Business Aviation Exhibition in February, and Summer Davos Forum in September.

6. The four most popular routes (round-trip)
Beijing to Shanghai, Beijing to Shenzhen, Beijing to Hong Kong and Shanghai to Hong Kong.

7. The 10 reasons to buy and 7 reasons not to buy corporate jets
The 10 reasons to buy business jets:
Safe and reliable flight (Safety): corporate jet has higher, more advanced and more authoritative technology and facilities to ensure flight safety, and personally-selected professional pilots and flight attendants ensure more reliable flight quality.

Free and flexible (Independence) : it can be scheduled to take off with their own landing time and destination, not subject to airlines. Especially for remote small cities, travel becomes more flexible.

"beauty-show” matter ("Face"): Here, the "beauty-show” matter is not only limited to the level of personal dignity and identity. With the continuous mature consumer awareness, corporate jet slowly evolves into a symbol of corporate strength and background, which helps to gain trust and recognition of customers with a business jet nearly one hundred million Yuan.

Better privacy and peace of mind (Privacy): it can effectively avoid the unknown passengers as well as harassing and tracking. Especially in business, the entrepreneurs can not only make their trip secret to avoid revealing business trends, but also securely use the closed and private environment of corporate jet to discuss the important business plans and programmes.

Highly efficient (Efficiency): it not only avoids the long waiting and boarding time, also can arrange better travel time for the entrepreneurs to achieve the maximum efficiency. For example, you can make full use of flight time to hold business meetings on a jet or arrange cross-border flight at night to ensure that the day of the trip is not affected.

More convenient (Convenience): it avoids many procedures in the airport check-in process. At the same time, you can enjoy more convenient than the first class, such as carrying more baggage and cargoes.

More comfortable travel (Comfort): The cabin has more space, more quality facilities, more fresh air, more appropriate cabin pressure and quieter environment.

More cost-effective (Cost-Efficiency): because the entrepreneurs shall experience long business travels and a number of vacations, it is more economical and practical to buy a corporate jet than to use civil aircrafts in the cost when the flight time reaches 500 hours or more,

Manifestation of personalized life quality (Personalized Lifestyle): you can design personalized cabin interiors and style according to your own preferences, equipped with love facilities and meals, which not only reflects the life quality but also improves the happiness index of travel.

Trend follow-up (Trendy): with more and more internationalized life style for the entrepreneurs, the increasingly mature market of corporate jet market has become a popular trend in the circle of Chinese Super wealth creators.

Seven reasons not to buy business jets:

Very expensive and high maintenance cost

Complicated formalities for route application / parking etc

Due to too high profile, too publicity, it does not meet the low-key character.

Civil aviation routes can meet travel demand.

Little understanding of the business jets

The entrepreneurs are more inclined to charter flight because it is more cost-effective and they can choose different models according to their needs under the same conditions.

It is limited due to t state-owned enterprises and other special corporate images.


8. Business jet replacement

Most owners have shown a greater willingness to replace their business jets, with the main reasons including:

The original business jets need to be replaced after use of a period of time.

The trend of globalization and the expansion of business, the demand for a longer range appears gradually.

It is affected by the replacement of corporate jet brand, and the more secure flight technology, more comfortable environment attract them to upgrade the existing business jets.

It was only an attempt to buy a corporate jet with lower configuration originally, and now naturally needs to replace with higher-end product to highlight his/her and enterprise’s identity and strength after closer acquaintance.
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