The Business Aviation Market in Asia-Pacific – A Look Back at 2021 and Insights for 2022

Alexander Tang

Sales Director, APAC • Global Jet Capital

Asia-Pacific is a market characterized by enormous diversity and striking economic growth, which makes serving the business aviation market both challenging and rewarding. With a shifting geopolitical landscape and an ongoing global pandemic to consider, the picture becomes even more interesting. As we move into 2022, let’s reflect on the state of the Asia-Pacific business aviation market in 2021 and consider what the future may hold.

A Uniquely Varied Region

Unlike North America and Europe, the Asia-Pacific region consists of countries with vastly different cultures, political regimes, and economic scales. Each country varies in its degree of openness to business aviation, which means different countries have markets in various stages of development. The attitude towards using business aircraft in the Asia-Pacific is also unique. It is not only used as a business tool for commuting within the region and among international cities around the world but also performs an important social function for high-net-worth individuals who wish to travel privately with extended family. For this reason, we see more of our Asia-Pacific clients desiring large-cabin aircraft than elsewhere in the world.

At its core, business aviation provides a fast commute between two places with a level of privacy and convenience that’s  unavailable in commercial aviation. The Asia-Pacific hosts about two-thirds of the world’s population and a powerful middle class is emerging in India, Mainland China, and Indonesia. This grows the retail market for quality goods and makes the global supply chain even more dependent on manufacturing in China, Vietnam, and Southeast Asia. As more wealth is created and increasing numbers of high-net-worth individuals emerge, a need for increased interconnectedness with major cities in the US and Europe will emerge as well. Business aviation facilitates these connections, which is why we believe the market will continue to grow and evolve in the coming years.

A Look Back to 2021 and Predictions for 2022

2021 was a seller’s year in the Asia-Pacific region, mainly defined by a high volume of transactions between Chinese sellers and US buyers. If quarantine restrictions in mainland China can be relaxed in 2022, we predict a significant demand spike for business aircraft—egardless of whether they’re being used for business travel or personal leisure. As we move into a third calendar year of impacted travel due to the pandemic, everyone is eagerly awaiting stepping back into their planes and taking to the skies.

While Asia-Pacific-based fliers are eager to get back in the air, the emergence of the Omicron variant in late 2021 and the associated resurgence of travel restrictions have put a damper on 2022 plans. As of January 2022, Mainland China, Hong Kong, and Japan have instituted (or re-instituted) travel bans and strict quarantine policies to help prevent the spread of the new variant, while Vietnam and South Korea remain slightly more lenient despite increasing precautionary measures.

Whatever the end of the pandemic looks like, consumer habits, expectations, and needs have been reshaped by years of a “new normal.” Initially, COVID-related hygiene concerns were a major reason why travelers worldwide began to pull away from commercial aviation and fly privately, but due to increasing numbers of canceled flights, discontinuation of once-popular international air routes, and more familiarity with the advantages of business aviation, these changes in behavior may be more permanent in a post-COVID world.

The Importance of Selecting an Expert Financing Partner

Pandemic-related restrictions are still subject to change as we move into 2022, adding an additional layer of uncertainty to an Asia-Pacific business aviation landscape that is already legally and economically complex. Finding a financing partner that has experience working within your jurisdiction is now more important than ever. There is no single financing product that works well for every business aviation user. Traditional financing has been a conventional choice for Asia-Pacific clients, but now we are seeing increased interest in the capital preservation made possible by the operating lease.

Choosing a partner that offers a wide variety of financing products and has expertise in structuring customized transactions is one way to protect your capital and minimize risk, even as the landscape changes. An experienced partner should be able to tailor your transaction to accommodate resident risk, expense predictability, capital conservation, tax treatment, privacy preferences, and more.

On a Personal Level

As a sales director for Global Jet Capital, I’ve been privileged to help high-net-worth individuals and corporations in the Asia-Pacific navigate the business aviation market during these unprecedented times. The most satisfying part of my job (besides allowing me to live in my native Hong Kong and enjoy world-class cuisine) is when I can work together with others in the industry (manufacturers, brokers, management companies, maintenance and repair organizations, etc.) to create business aviation financing solutions for clients that accommodate their finances and personal preferences. A major aspect of my role is sharing the advantages of financing vehicles that Asia Pacific customers may not be familiar with, including the operating lease. As a mechanical engineer by training, I’m also fascinated by how aviation technology is evolving and try to share that perspective with my clients.

Working with Global Jet Capital allows me to be an integral part of deals that help individuals and businesses better utilize business aircraft to fit their unique needs. We were able to close an operating lease transaction in 2021 that involved multiple jurisdictions, including securing EASA registration and FAA registration. This had to take place within a limited window of time when overseas citizens were allowed to go back to their own country without a quarantine requirement. We were able to get everything ready within three weeks, thanks in part to the collaborative spirit and deep experience of everyone at Global Jet Capital. Communication channels between our Asia-Pacific office and US headquarters are always open, helping us stay up to date and fully informed when navigating complex situations for our diverse client base.

You can find out more about Global Jet Capital and the services that it provides for clients in the Asia-Pacific and throughout the world by visiting the company’s website at: www.globaljetcapital.com

Global Jet Capital