Charter Report Market Intelligence

Sino Jet’s China Charter Increase

Sino Jet’s China Charter Increase
Sino Jet

Speaking from her Hong Kong office, Sino Jet Group’s president Jenny Lau sounds a lot more upbeat about the prospects for private jet charter in China than many others would have you believe.

You could argue that she has to be positive, after all, not only is she the head of Asia-Pacific’s biggest private jet operator, but she is also the chair of AsBAA – the Asian Business Aviation Association. But Lau backs up her comments with data, all of which paints a much rosier picture than many would have you believe.

Jenny Lau, Sino Jet Group President

In the early days of the COVID-19 pandemic it was a different story. Scheduled airline flights were cut, and people’s movements were restricted all around the world as everybody stayed home trying to stay safe. Although the early days of the pandemic did see some charter flights taking place, these were largely repatriation flights – moving people from where they were stranded back to their home.

As the pandemic began to subside, more people began to see the benefits of flying privately, partly due to a lack of scheduled airline flights, but also in part due to the increased safety and security that it offers. Not only could travellers be comforted by the fact that they would only be flying with people they know, but because they were able to use FBOs rather than airline terminals, they could reduce their possible points of contact with other people. According to one Austria-based private jet operator, by flying privately you could reduce your potential COVID-19 touchpoints down from 700 if flying on a commercial airline, to just 20 if flying on a private jet.

Although mainland China was amongst the last countries to open itself back up to outside visitors, it had one advantage that other countries didn’t always have, which was the size of the country itself. What this meant in practical terms was that the domestic market could thrive even though very few international flights could take place. This is especially true given that pre-pandemic, Beijing to Shanghai and vice versa was already one of the busiest private jet routes in Asia-Pacific.

So, with the domestic market thriving, China’s private jet charter companies flourished. But there was always one big question, one nagging doubt at the back of everybody’s minds; What would happen when scheduled airline services returned to pre-pandemic levels?

According to Lau, that nagging doubt was unfounded, as not only have the steady stream of users that were first attracted to business aviation stuck around, but the numbers have swelled since China opened its borders again in early 2023.

But whilst Lau paints a rosy picture of the Chinese charter market, she also points out that the increase in charter users has brought with it an unforeseen problem, saying that there aren’t enough aircraft to satisfy the country’s demand for charter flights.

“You’ve seen the travel patterns since January this year [when China opened its borders], it’s been crazy, people have been going everywhere,” says Lau. “But there aren’t enough aircraft.”

Lau is partly referring to the number of aircraft that have left the Greater China business jet fleet over the past year, which, according to Asian Sky Group’s 2022 Business Jet Fleet Report, declined by as much as 15% in 2022.

We have a self-owned Falcon 7X that we have leased to another company, and the operator just told me that last month the aircraft flew 100 hours. That’s how strong the demand is.”

“Travel throughout Asia-Pacific has been strong, and travel to Europe and the US has been stronger than before. Japan is a very popular destination, and inside China. It’s just that we don’t have enough aircraft.”

Lau also says that she’s noticed a shift towards charter from those owners that previously had their own aircraft but decided to dispose of them. These days she says that there is more of a trend towards charter, or even long-term leasing, but that there just aren’t enough aircraft available to satisfy the demand for charter.

“That puts us in a situation where we might have to, perhaps, raise money to buy more aircraft to service our clients,” says Lau. “Or we could just bring in some outside resources and work with some industry peers to get the fleet adequately supplied for this part of the world.”

Overall, Lau says that she can only see charter demand increasing in the region, whilst on the flip side she sees the number of new aircraft acquisitions falling, especially by those that previously brought aircraft for their own, or their own company’s usage.

“You have to look at the overall economic cycle of Europe, the US and China. Because with interest rates rising for the past year or so in the US, everyone is waiting for the point where there is a sharp drop in the economic cycle,” says Lau. “Once that happens there will probably be more aircraft available on the market at a very discounted value. I think the more mature clients are waiting for that moment.”

Another part of the reason that people are moving towards charter, especially in China, is the current long lead times that it takes between ordering a new aircraft and actually taking delivery of it, with Lau saying that for new aircraft types especially the lead times could be as long as two to three years.

“People are kind of in a wait and see period at the moment. But some of them that are having very intensive travel demands will buy regardless.”

With more people chartering, and Sino Jet possibly in the market for new aircraft, the company has begun to explore more ways of introducing what it likes to call ‘end -to-end’ travel. The company already owns a number of FBOs across China, with the most recent one opening up in Chengdu, but Sino Jet is already looking towards the future, and how it can integrate the next generation of eVTOL (Electric Takeoff and Landing) vehicles into its offerings.

As such, the company has a set up a division that has acquired 100 eVTOLs from Chinese manufacturer Aerofugia. The AE200 model that the company has acquired is planned to accommodate up to four passengers and can travel up to 300km.

Although Sino Jet’s eVTOL division is still working out the finer details of what it plans to do with the eVTOLs once they arrive, it is likely that the company will base the aircraft at its FBO locations and fly them to and from the nearest locations that it can, to pick up and drop off its clients that have flown into, or will fly out of, its FBOs.

This will help the company ingrain itself deeper into the travel plans of its clients, and, help it offer a more complete end-to-end travel solutions that its competitors can’t, initially at least, compete with. 

Sino Jet