Any serious discussion about the future of private aviation has to factor in the explosive growth of Asia’s economic wealth. Asia is expected to contribute $40 billion in private aircraft sales over the next 10 years.
China takes center stage
China is driving much of the demand for private aircraft. In 2011, the number of Chinese billionaires grew by 66 percent (compared with the rest of Asia, where the number grew by 32 percent). Analysts predict China’s current fleet of just over 150 aircraft will grow to a staggering 2,470 by 2030.
China has not been immune to the economic uncertainty of the past four years, but the country is still considered a growth market and has the second largest economy in the world, behind the U.S. In addition, the country’s significant land mass supports continued economic and population expansion.
Unfortunately, some Chinese government regulations and restrictions continue to hinder private jet adoption. High aircraft import taxes, significant user fees and an underdeveloped airport infrastructure have had a dampening effect on sales from the region, but industry insiders believe the situation will improve over time.
Indonesia and Asia Pacific showing strong demand
Indonesia is also a key player in the Asian market, with a growing class of high net worth individuals (HNI) supported by a strong economy. Also, Indonesia’s geography of more than 17,000 islands spread out over 3,000 miles makes flying by private aircraft the most practical option for the business traveler. The government is now taking a proactive approach to expanding airport facilities in this mostly rural country and is also implementing routine safety inspections of its private aircraft fleet.
The number of billionaires found in Asia Pacific now exceeds all of Europe, so it wasn’t a surprise when Gulfstream Aerospace recently reported that almost half of their 2011 third quarter orders came from the region. Of course, economic enthusiasm is diminished somewhat by Japan’s ongoing efforts to recover and rebuild from last year’s devastating earthquake and resulting tsunami and nuclear disaster.
Many private aviation analysts believe the global market for private jets is on the brink of a modest rebound in 2012. It looks as if Asia’s continued economic expansion is the fuel for that recovery.