During an interview with Mr Liao Xuefeng, CEO of China Business Aviation Ltd., Mr Liao said one of the biggest problems facing the industry is the high customs duties and VAT imposed onto foreign business jets. These two tax items amount to as high as 22% of the original price, much higher than those for large commercial jets which are at 5%. Mr Liao also said they are talking with the government in a hope to improve the situation.
The second challenge is the shortage of pilots. This can be observed from the entire general aviaiton industry, he said. Back to 10 years ago, Mr Liao has proposed an upside-down triangle model to describe this problem. This model is now widely accepted and is now becoming a common understanding. The Chinese civil aviation industry has been developing rapidly, however, demand on general aviation is maintaining at low level, this is quite astonishing. There are two reasons for that: one, although the Chinese aviation industry is of no small size, but it has only a short history and second, China has a strict air control system.
However, from the long perspective of view, development of both the general and business aviation industries will provide solid support to the civil aviation, and will become a reserve of the civil pilots and repairmen, and thus further boosts the infrastructure construction of the aviation industry. In the U.S. it is hardly possible to find a fresh graduate from a pilot school to enter into the aviation company as a pilot. They mostly start to fly in the general aviation industry, and then gradually turn to the regional airlines and only lastly are they able to fly large aircrafts such as Boeing 747.
Yet amids the bottlenecks there is huge money potential. As Liao told us, one of his clients has bought a large jet, while he has little knowledge of the Chinese general aviation industry before the purchasing. Because of that purchase, he has found out the shortcomings of the industry and pretty soon he has procured a number of flying training equipments and tried his luck in that pilot training business. |