A the moment the business aviation industry appears to be at a pivotal point in China. The private aviation age has dawned here, but it remains a somewhat foggy dawn with reduced visibility for anyone wanting to operate business aircraft in the country. The outlook is barely any clearer for manufacturers and service providers seeking to capitalize on rising demand.

The first generation of Chinese business jet owners still face significant administrative hurdles to importing their aircrafts. At the same time, limited airport infrastructure and restrictions on access to airways continue to dilute some of the flexibility that business aviation is supposed to deliver–and especially for foreigners.

For the time being, the government continues to take a conservative approach to controlling the influx of aircrafts. It’s a stance that some Western experts say is merited, given that the country’s existing infrastructure probably couldn’t cope with the deluge of jets that a completely unconstrained free market would produce.

By the end of 2011, little more than 150 business jets were registered in China, but manufacturers expect this number to grow exponentially over the next two decades and beyond. For the time being, though, the process of importing aircrafts into the country remains cumbersome and there are tales of business jets sitting on tarmac at ports of entry waiting for release to their owners. In some cases, buyers opt to have their aircrafts delivered outside China and registered there, but this means they are much more restricted in how they can operate within the country–having to endure some of the restrictions that apply to foreigners. For Chinese-registered aircrafts, the situation is relatively straightforward in that any aircraft with fewer than 29 passenger seats is considered as being for private domestic use and so is relatively free to make trips within the country.

ONE OF THE MAIN STICKING POINTS FOR CHINA’S WOULD-BE JET SET is the requirement to be able to prove that you have found an acceptable company to operate the aircraft. The authorities require that the jet be flown under a management contract and, despite the best efforts of global service providers to get established in China, there are still relatively few management companies with the necessary Chinese air operators’ certificate. In some respects, it’s a classic Catch-22 situation: because there are not enough approved operators in China, it’s hard to bring aircrafts into the country, and yet because there are still relatively few aircrafts, it’s hard for the management companies to build their businesses–especially given the restrictions placed on international joint ventures.

Most of the operating companies are offshoots of largely state-owned Chinese airlines, which find it easiest to get the necessary approvals, and also operators based in the quasi-offshore enclaves of Hong Kong and Macau. Increasingly, faster growing aircraft management companies are joint ventures between Chinese airlines and private companies, including Western-based groups that have more experience in business aviation. Among the main and emerging players are Metrojet, Deerjet, Asia Jet, Air China’s Beijing Airlines, Hongkong Jet and Hainan Airlines subsidiary Beijing Capital Airlines.

Another constraint on the expansion of China’s business aviation market is a shortage of pilots. For operational flexibility, flight crew generally need to be Chinese and the obvious place to recruit them would be from the country’s fast-growing airlines, where opportunities to earn overtime pay make the switch to business aviation a hard sell and a cost inflator. In theory, Western pilots who could master the Chinese language and pass local exams could fit the bill, but this is a tall order. In many cases, foreign operators also have to hire a local, Chinese-speaking navigator at a cost of up to $1,500 per day. The advantage of doing this is that it could open up access to airways and airports that otherwise are off-limits for foreigners.

Non-Chinese operators remain restricted in terms of the numbers of mainland airports they can use. For the most part, they are confined to the major airports, obviating a key advantage of business aviation, namely the ability to fly closer to the passengers’ final destinations by using smaller airports. With airline traffic burgeoning in China, access to the country’s major airports depends on getting landing slots and these are routinely granted to scheduled operators ahead of business aircrafts.

There are still fewer than 200 civil airports in China and many of them are not available to private aircrafts. By comparison, a large-cabin business jet in the U.S. can access more than 5,000 airports. However, according to flight-planning specialists, Chinese officials are starting to grant permission to fly into airports that have previously been blocked to foreign operators.

Operating into China is much easier now than it was even two to three years ago, but it is still strict compared with some countries. Now when you put in requests, the turnaround time is much faster. Before, you needed several weeks [to get flight permits] but now you are getting them within a week and it is also a bit simpler in terms of what they are looking for in terms of paperwork. Overall, the process is becoming more predictable.

Flight-permit and air-traffic-control navigation fees are far higher than they would be for equivalent flights in North America or Europe–amounting to several thousand dollars per trip. On top of this, you should budget for some $3,000 in “government compensation fees” at every place you land, plus a $1,200 airport fee.

THE STARTING POINT FOR ANY TRIP BY A FOREIGN AIRCRAFT OPERATOR IS TO HAVE A SPONSOR–someone who is officially inviting you to come to China. Previously, if you wanted to make a trip that involved visits to multiple cities, you had to provide information about your sponsor for each destination, including full address details, but now a single sponsor for the entire trip will suffice. The authorities will check each aspect of the trip with sponsors to ensure that they genuinely issued the invitation, rather than it being a bogus arrangement to get around the rules. The authorities have cracked down on ‘for-hire’ sponsors and this is not something that companies should be arranging for you; the sponsor needs to personally accept responsibility for having invited you.

Flexibility is a big reason for flying privately, but don’t count on being able to fully benefit from this advantage in China. The aviation authorities are not at all keen on last-minute changes to flight plans, such as if passengers arrive late for departure or change their mind about when and where they want to fly. Chinese officials are getting somewhat more accommodating in these situations and he has been able to secure new permits at short notice in some circumstances. But generally, you shall manage client expectations around the need to plan trips as thoroughly as possible and not count on being able to make changes.

It is possible to change flight plans once in China. But this can take two or three business days, which may well be impractical if you’re planning to spend only a day in each city, You can generally change a departure or arrival time by an hour or so without a new permit, but to change them by three or more hours, you’ll need approval that could take another day to arrange.

The requirement to hire a Chinese navigator no longer always applies. It tends to be when you are flying to more remote areas, rather than to places like Shanghai and Beijing. Some airways aren’t listed on charts and are known only to Chinese pilots.

Immigration is another high-priority item for the Chinese trip-planning checklist. You should apply for your business or tourist visa in good time and if you can’t be without your passport while it’s being processed by your nearest Chinese embassy, you should be sure to get a second passport to use for trips in the interim. Your pilots will need crew visas and if one of them gets sick or can’t make the trip, you’ll need to be sure that replacement crew also hold a current visa. What’s more, if you’re going to change out your air crew for flights within China or your return trip (as might well be necessary for a prolonged itinerary), then any pilots or flight attendants heading home early by commercial airline will need to leave the country on a separate business or tourist visa.

Other factors to consider are that if you are traveling to northern China in the winter there is little hangar space to protect your aircraft from the elements. It can take some time to get an aircraft de-iced–indeed ground support services generally are pretty rudimentary.

Also be alert to the local holiday schedule–especially around the Chinese New Year. During this time the process for securing flight permits may be prolonged.

DESPITE THE MANY OPERATIONAL HURDLES, PRIVATE AVIATION STILL BEATS AIRLINE SERVICE in China. But the practical challenges of operating into China haven’t significantly improved yet in many respects and without the support of established trip planners it would be prohibitively difficult for foreigners.

Administratively, though, the situation is more straightforward, if only in that all flight requests can now be channeled through the General Administration of Civil Aviation of China (CAAC). A decade or more ago, all requests had to start with the aircraft owner’s national embassy in Beijing, which would be required to submit a formal diplomatic note to the Chinese Ministry of Foreign Affairs and another to CAAC. While the official notice period for permits is still advertised as being 10 working days, you may be able to get them in as little as 24 to 48 hours.

One of the greatest challenges in China is that most business aviation traffic is still going through the main airports in Beijing and Shanghai and these are overly congested with airline traffic. At Beijing, for instance, between 8 a.m. and 10 p.m. foreign-registered aircraft are limited to just 15 movements per day and business jets are often effectively blocked on these grounds.

South of Beijing, Tianjin is available as an alternative airport but this is a 90- to 120-minute drive from downtown. There are few alternatives to the main airports around the country and CAAC still excludes general aviation traffic from many airports altogether.

That said, some progress has been made in terms of dedicated infrastructure. The 2008 Olympic Games spurred Chinese officials to create an enclave for business aviation at Beijing Capital Airport. In Shanghai, Hongqiao Airport is a more convenient downtown option to the far more remote Pudong International Airport. Hongqiao is also home to one of the country’s few purpose-built FBOs and this is run by Australia-based group Hawker Pacific.

Hong Kong-based Evo Jet Services flagged the importance for foreign operators to avoid inadvertently falling foul of their own countries’ legislation when having agents make trip arrangements for them. U.S. and UK companies, in particular, are subject to strict regulations that could misinterpret a facilitation.

Cautions should be made against planning flights to China over restricted airspace such as that of North Korea or Myanmar. Another consideration is that a flight involving passengers being collected along the way for flights within or out of China can be considered as cabotage operations and this can trigger additional paperwork and fees of up to $30,000.

With our years of experiences with the Chinese business communities, Chinese government, Chinese consumers, as well as multinationals, we're able to provide our clients with the necessary consultancy, information, analyses and strategic orientation when you want to march into the Chinese business aviation market.

We provide consultation to foreign investors and other aviation stakeholders (incl .aircraft manufacturers, charters, airports, avionics providers, leasing, insurance, trading, MROs, FBOs and other services) on sales/market entry and investment with our focus on the Chinese business (incl. private, corporate and executive) aviation sectors.

We advise on strategic planning, business planning, feasibility studies, market entry development for those willing to enter into or expand their business aviation sector in China.

We help our clients find an optimal way to start their business in China; we also assist our clients in clear the way for obtaining business licenses – for VIP chartering, aircraft manufacturing, flight training and other areas of the business aviation sector. Our government relations help our clients avoid any misunderstandings which may arise over the period of operations in China.

Strategic Advice

strategic advice, analysis, and guidance aimed at solving business aviation-related management and operational problems
strategy development, planning, optimization and consulting
market development strategy
competition strategy
pricing strategy
distribution strategy

Business Management

business modeling
resource modeling
business restructuring
business intelligence
business plans/planning
financial plans/planning
feasibility studies

Market Analysis, Sales and Marketing Consulting Services?

Marketing, sales, product and services positioning, planning, development, analysis, synthesis, research and forecasts
analysis of market trends, risks, opportunities
strategic insights, ideas, and recommendations
best practice benchmarking
market intelligence
marketing and sales support, representation and partnership development
marketing, advertising and promotion
charter brokering
mergers and acquisitions brokerage
transaction support
seminars

Business Aviation in China Startup/Expansion Support

business aviation appraisals
initial startup certification assistance incl license application
safety and regulatory compliance audits
project management
aircraft registration procedures
aircraft maintenance consulting and maintenance cost analysis
aircraft stock optimization analysis

Information Technology and Internet/Online Information Services

outsource business aviation B2B market research and editorial services
real-time news, data, and market intelligence about the business aviation industry in China
e-commerce for the business aviation industry in China
online marketing for the business aviation industry, specializing in cost-effective marketing plans, including social media in China
researches on the Chinese business aviation websites / online marketplaces and the effects of the Internet on the business aviation industry in China
databases of Chinese business aviation industry

China Business Aviation Information Research Services and Consulting

the provision, analysis, and interpretation of information and market data
preparation of business aviation compliance manuals, brochures, web page copy, direct mail, advertorials, articles, advertising copy, directory compilation
business aviation data and communications services
trade and technical publications
industry, commercial, research and intelligence reports
monthly reports

Some time last year, Chinese government has officially kicked off the state initiative to boost the general aviation industry (business and private aviations are among the general aviation sector).

This includes a package of policy and regislation measures such as

1. deregulations (lifting up of the air control measures by CAAC and the AirForce),
2. government endorsement of the development of the general aviation industry into their development plans,
3. financing,
4. incentives,
5. taxation mitigation,
6. and direct investment.

International cooperation for technology and market is also enhanced.

Major state-owned and private investors are rushing into the industry. Huge amount of money is being poured into various areas of the business aviation industry, such as

1. aircraft manufacturing,
2. airport construction,
3. pilot trainings,
4. chartering,
5. FBO,
6. ground support,
7. entertainment flights etc.

In one word, the industry is observing a full scale of booming. An explosive growth is being expected. And it’s the right time to enter into this market. Some optimistic observers even predict that in a decade or so, the industry will develop to a level compatible with that of the U.S. with an annual turnover of between RMB 10 to 400 trillion.

China needs thouands of aircrafts,? thousands of airports, very large number of pilots and many other products and services.

However, not all of them will be developed at the same speed and the same timeline: some will be earlier and quicker, and some later and slower. For example, construction of airports, training of pilots are among the most urgent needs, while aircraft manufacturing and airline operation might be coming a little slower.

Moreover, there are many problems and barriers to the smooth development of the market and industry, such as

1. policy barrier,
2. complicated procedures,
3. lack of flight traditions among the people,
4. short of supporting facilities etc.

Nevertheless, the 60 000+ billionaires and 1 million+ millionaires (in US term) will certainly be the large client base for the pricy products.

We also guide our clients on detailed plans for your business, corporate aviation and commercial aviation out of China. Before making your venture into the Chinee business aviation market, you shall seriously thnk about:

1. what is your uniqueness,
2. what are your strong points,
3. where is your weak side,
4. various possibilities of going to the Chinese BA market and figuring out which is the best way,
5. what’s your plan and target? what your company want to share in the industry
6. how to secure your business in China over the next 20 years or so, how can you forsee for this long period of time

Thus your business plan must be comprehensive and wide-reaching, hence following points need to be taken into consideration:

1. The future company to be established in China, incl. joint venture. Consideration shall be given to licenses, permissions, company establishment proccess, company management and operation etc
2. Mission, business / management model, client and market orientation, scope of services
3. Feasibility of the planned services: aircraft types, operation regions, base airports and other facilities, equipments, flight and aviation staff and training, quality and reliability of operations, considerations of China specific aircrafts and services like cabin refurbishment, food, language etc
4. The status of the business aviation market and the necessity of the establishment of the company
5. Demand and supply
6. Competition and information about private and foreign competitors
7. Marketing and sales
8. Investment, financing and fundraising
9. Financial planning and ROI analysis
10. Risk management

We take VIP charter as an example

1 Business areas to begin with: international VIP chatering? (Short Term Plan 1-2 TEARS)

I suggest to begin with the international commercial and/or private business jet operations, namely VIP chatering.

Other businesses will be considered later on

2 Who are your potential clients

3 Your presence in China
If you want to do any business in China, you must be there by some types of presences:

1. Appoint an agent or partner like us
2. Set up your own representative office
3. Establish your fully owned company with legal operation rights
4. Establish a joint venture with a local company
5. Build up your own operation networks in China etc

I suggest that initially you either appoint an agent or just delegate a representative office of one or two persons to promote your business during the first one to two years.

4 How to promote your company and business

Once you’ve determined your business scope, identified your clientele, and set up your own business unit in China, you shall find out

1. who they are,
2. where they are and
3. when they need VIP flights.

I am firmly sure that there are hundreds of thousands of people who fall into the above categories.

The point is, how to approach them.

There are many ways. One is direct contact, and others are indirect coontacts:

1. Internet advertisement and broadcasting,
2. TV and magazine advertisement,
3. visits and sales to aviation clubs and elite clubs,
4. participating in fairs/shows/exhibitions/symposia, expositions etc etc. This shall also be carefully planned.

Your website needs a Chinese version as well. Also your pamphlets need to be localized.

Well, without these preparations, we cannot guarantee that there are clients in our portfolio who are willing to purchase good number of hours on your aircraft, before reserving your aircrafts and form a local company in China. Therefore you need the above marketing and investigations done. This job can be subcontracted to us as well.

5 How to start the chartering operation
Now that you have a certain number of people in hand, who are ready to go aboard your planes. we can consider to contact CAAC, local authorities and relevant airports about how to obtain the

1. VIP chartering licenses,
2. permissions,
3. procedures and fees

for foreign aircrafts operating to and from China.

If you want to set up your own company or establish a joint venture, there are also regulations to comply with, which will be further studied.

The key to success in China is a sound relation with the government. Your business shall also contribute to the social and economic development of the region and country, as well as to the support of the regional and central government, while earning your own money. That will be a win-win happy ending.

6 About joint venture
You need to carefully investigate the Chinese operators, in order to choose the best partner for you. You shall consider their

1. management,
2. business model,
3. business strategy,
4. government relations,
5. financial strength and
6. many other factors.

We will consider this in our task of business planning and the joint venture, which in my opinion, shall be established during the 2nd phase of your China operation – after you have been operating for some time and that you have secured a certain number of clients yourself and have taken a certain portion of the market share, otherwise you will be in a disadvantageous position at the negotiation table with whomever.

The need to invest time and understanding in developing a successful Business Aviation consultancy in China

Our experiences

Business Aviation in China is reminiscent of the early years of business aircraft in the USA. An interest in business aircraft exists, but little is known about the true strengths and challenges of this form of transportation. Truly understanding the needs of Chinese companies and high-net-worth individuals takes considerable time.

Trust is an absolute requirement, so is patience. We had to be willing to listen to the needs of those we met, and appreciate the culture of business relationships in China.

Networking is the primary means of gaining clients. We have found that the businessmen and high-net-worth individuals we want to reach are not particularly wedded to email. Their principal form of communication is the cell phone.

Our first contact typically is somewhere below the level of the decision maker. Months of dialogue took place before we moved closer to the party who will authorize a purchase, all the while demonstrating our commitment to be a sincere source of accurate and relevant knowledge. We provided insight into aircraft selection, performance, alignment between mission need and aircraft capability, and technical issues such as crew qualifications and maintenance. We addressed all questions including those relating to finance.

Because we have been patient and trustworthy, we have satisfied clients, and they have told their associates of their satisfactory experiences with us.

China Business Aviation Monthly Report (CBA/MR)

This report is a highly comprehensive, yet concise, compilation with researches, analyses, and information with timely insights into trends, events, and activities affecting wealthy consumers,the executives and suppliers.

The report contains independent and unbiased data, information, interviews and analyses of the market in China on a monthly basis, which is the unique and the only one of such kind available on the market.

The report covers a wide spectrum of topics: Policy, Regulations, laws, Low sky reform, Government? plans, Studies, analysis, review and proposals, Development trends & forecasts, Current status, Problems, Regional development and industrial parks/bases, Market? &? investment, Sales & trading, Airports, Aircraft, Engines, Parts & accessories, Training & pilots, FBO, Fuel, Leasing, Aircraft/fleet management, Insurance, VIP charters, Aviation IT and Internet, Aircrafts owners, Chinese business aviation overseas, Foreign companies in China, Events, Business opportunities and many more critical information and researches.

It’s a monthly report about the Chinese business aviation industry and market; with the following info:

• Iintroduction???
• Key? news??????
• Policy
• Regulations, laws????
• Low sky reform
• Codes,standards
• Government??plans
• Studies, analysis, review and proposals
• Development trends & forecasts
• Current status
• Problems
• Regional development and industrial parks/bases?
• Market??&? investment
• Sales & trading ??
• Airports??
• Aircraft
• Engines
• Parts & accessories
• Training & pilots????
• FBO
• Fuel
• Leasing?
• Aircraft/fleet management
• Insurance
• VIP charters??
• Aviation IT and Internet
• Aircrafts owners???
• Organizations?
• Chinese business aviation overseas
• Foreign companies in China
• Events???
• Business opportunities??? ??????
• Private aerospace???
• Success stories????
• People in the spotlight?