“Our goal is to become number one in China”
The boom times of China’s business jet fleet growing by double figures each year are over. But despite a tough market and a slowing Chinese economy, one operator is still growing fast.
“Our goal is to become number one in China”
The boom times of China’s business jet fleet growing by double figures each year are over. But despite a tough market and a slowing Chinese economy, one operator is still growing fast.
IN 2018, the Chinese economy grew officially by just 6.6%. In most countries, 6.6% would be a great result, but it was China’s lowest growth rate since 1990. Confidence was hit further by the ongoing trade war with the US.
With this backdrop it is no surprise that companies and individuals have put their aircraft purchase plans on hold or even sold off their aircraft completely. Analysis by Asian Sky Group shows that the Mainland China business-jet fleet contracted by -1.4% in 2018. Greater China, including Hong Kong, Macau and Taiwan contracted by -0.2%.
The three largest operators in the region all lost aircraft from their fleet during the year – mostly as aircraft left the region. Despite this, Chinese operator Sino Jet grew its fleet from 30 aircraft to 39 aircraft in 2018. (Other winners included Amber Aviation, which began operations in 2015 and doubled its fleet from four to nine aircraft in 2018, and HK Bellawings which added five aircraft, growing its fleet by 23%.)
“There will be growth this year, but it will be slower than last year,” says Jenny Lau, president of Sino Jet. “Prior to ABACE we had six or seven clients approaching us for management, so we are evaluating what airplanes and clients we want.”
Lau founded Sino Jet in Hong Kong in 2011 having never worked in business aviation before. A banker at the time, Lau was already representing a client with an aircraft when she saw an opportunity to start a management company. Lau says that at the time she could see that China was full of potential, especially as many of the local companies did not yet fully understand how aircraft management works. “I also had a book of clients looking for management,” says Lau.
Sino Jet grew steadily, adding several aircraft every year ,but the company really took off when it was acquired in 2014. Tsinghua Holdings Industry Investment Fund already had its own operator called Big White Bear Jet, which had a small fleet of private jets comprised of a Gulfstream G450, a Jenny Lau Gulfstream G200 and a Bombardier Global 5000. Tsinghua felt that the Sino Jet name was more recognisable than the Bear Jet name, so the fleets of both operators were merged to form Sino Jet Group. Two other companies are in the group; a ground-handling company called Far East Aviation Service and GEOSTAR, a luxury travel club.
Lau says Sino Jet is not looking for growth for the sake of it. Instead she says that’ going forward, Sino Jet will be focussing on clients that understand aircraft management and appreciate the service that the company gives. She says the firm is not looking for “risky clients that could be detrimental to the company.”
“There will be growth this year, but it will be slower than last year”
That is partly due to the unrealistic expectations of new aircraft owners in China, who don’t necessarily understand the restrictions placed on aircraft movements. Lau gives the example of a client who did not understand that he could not change the destination of the aircraft as it was taxiing to the runway. New owners, says Lau, take some educating on why FBO charges are so high in the country.
Waiting for growth
Lau says that Sino Jet is already putting a strategy in place for when growth returns. “In situations like this, when the economy is not very stable, we want to play a safe card and not grow too fast.” With uncertainty surrounding the Chinese economy, the International Monetary Fund originally forecast GDP growth to be at 6.2% for 2019. It has now upped that to 6.3%, mostly thanks to what it calls ‘improving’ US China trade tensions and the Chinese government’s efforts to counter the effects of US import tariffs. With China’s business-jet fleet beginning to shrink, many have looked outside of the country for new opportunities. And whilst there have been signs of growth in South East Asia, for Sino Jet at the moment, China remains its core market. “Our goal is to become number one in China, and then we can start to explore the surrounding markets,” says Lau. Getting to the number-one spot in China might happen soon. In 2018 Sino Jet became the third-largest operator in the country, overtaking Business Aviation Asia and Jet Aviation, two of the biggest management companies operating in the region in recent years. Ahead are TAG Aviation with 46 aircraft (down one in 2018) and HNA Group’s Deer Jet with 48 aircraft (down eight in 2018).
As well as running Sino Jet, Lau has also chaired the Asian Business Aviation Association (AsBAA), for the past two years. She steps down from the role in June 2019. “Originally I was going to go for another tenure, but I feel it is so critical for my company to be stable, so I decided to put more time into Sino Jet,” says Lau. “Perhaps in two years’ time, if everything is smoothed out, then I will consider coming back and standing for election again.” Lau says she is proud how the local AsBAA chapters are now more active than ever. This she says is down to the passionate teams (pictured) who believe that the association can make changes. But for now, she wants to concentrate on making Sino Jet China’s largest private jet operator.
CJI Connect
Jenny Lau – President, Sino Jet +852 2588 7001 | [email protected]
