http://businesswatch.21cbh.com/h ... ry_0611/181991.html
June 11, Gulfstream Aerospace Corp. the world’s leading manufacturer of business jets, said China has emerged as one of the strongest markets for business aviation thanks to years of economic growth and wealth accumulation.
Roger Sperry, Gulfstream’s vice president for internationals sales, made the comments during the recent Asian Business Aviation Exhibition in Macao, according to the official People’s Daily.
“When we look at the market for China and the region, we see considerable upward potential.”
According to market research conducted by aerospace analyst firm Teal Group, Asia was the most robust market for business jets last year, growing 15% from a year earlier. That outpaced Europe at 14% and the United States at just 2%.
Teal Group expects the size of the global business jet industry to reach $94.4 billion in the next decade, and for China to account for RMB 60 billion of that figure.
An industry source told the 21st Century Business Herald that while foreign enterprises operating in China accounted for most of the country’s business jet industry over the last decade, local enterprises are catching up fast as the economy grows.
“Many of our domestic clients are companies or individuals from the real estate, mining and energy sectors As they are accelerating their global expansion, they have a growing demand for business jets,” said Liu Ziqiang, Northern Asia sales director at Hawker Beechcraft Corp.
Industry sources attribute the growth of the Chinese market to strong wealth creation in the last decade, simplified flight-planning in mainland China, cooperation with local authorities in the certification and registration of business aircraft and new financing sources.
According to the Hurun rich list 2010, there are 87,500 RMB multimillionaires and 55,000 RMB billionaires in China. Around one-fifth of those listed have expressed an interest in buying a business jet.
However, industry sources said that the Asia market still faces plenty of challenges.
The paper has learned that the current import duty for business jets in China is 4%., in addition to 17% value-added tax. The U.S only imposes rates of 1% and 5%, respectively, while European countries and Japan impose almost zero tax.
Liu said he estimates that the sale of business jets in China will grow at least 30% if the government reduces tax rates.
Sperry said that although the country’s aviation infrastructure, including airports, ramp space, business-aviation terminals and service facilities, is growing, it cannot meet growing demand for business jets.
“The number of commercial access airports in China was less than 200, in comparison to some 4,000 accessible to business jets in the United States.”