What Will It Take For China's Private Helicopter Market To Lift Off?

A special luxury helicopter designed in partnership between Airbus (formerly Eurocopter) and fashion label Hermès. (Airbus) As China’s number of high-net-worth individuals skyrockets, we’ve heard a lot of analysis about the future prospects for the country’s private jet industry. Another air transportation industry closely eyeing China’s wealthy, however, is the slowly growing market for private helicopters—although obstacles remain for its development. Recently, Sina’s fashion section published an article on private helicopter penetration level in China, the market potential, and why the price of owning and flying private helicopters is still “up in the air” even when money is not a problem for the ultra-rich. Currently, to purchase a private helicopter in China, it only takes less than 3 million yuan [US$481,170], which is almost the same price as a luxury car; however, the current helicopter penetration level is still far lower than that of cars in the country. The major restriction is that China’s domestic air traffic has not been liberated. From flight application to final approval, it can take 10 days, whereas it only takes 10 minutes in the United States. Secondly, the service system for private helicopters including sales consulting, maintenance, and fuel supply is not yet mature in the country. According to general aviation statistics, there are 156 registered private helicopters (200 if including those who did not obtained airworthiness certificates) in China—a tremendous contrast to 20,000 private helicopters and 220,000 private fixed-wing aircraft in the United States. The fact that there are very few private helicopter owners scattered across the country makes it difficult to grow the helicopter market. The operating cost therefore naturally increases, and makes it a luxury only very few individuals enjoy. Despite current challenges, the author is optimistic about the market’s future outlook based on the spending behaviors and mindset of the well-heeled. Although helicopter ownership among rich Chinese remains low, but the number is growing every year. According to professionals in the industry, there have been a number of flight training centers established in Shanghai and Chengdu that provide private pilot training for at least 50 student pilots each year. The tuition costs approximately 80,000 yuan [US$12,831], but the spots are always easily filled. Those who are willing to spend 80,000 yuan for flight classes never considered it a skill needed to make a living, but hope to purchase and fly their own aircraft one day. Motives behind helicopter purchases are usually the following three: first, business needs of VIPs whose precious time cannot stand a delay that is worth a million dollars; second, the willingness to invest in a unique hobby; third, the need to show off when luxury cars are yachts are no longer enough to exhibit wealth. Aircraft owners in the country can usually be classified into the three types above. Currently, we believe the rich in China mainly purchase them for business needs and for the balance between work, family, and leisure. As the number Chinese millionaires, who are the main consumers for helicopters, continue to grow, the author believes private helicopters will someday be considered more of a necessity than a luxury for this group, which will have more incentive to purchase as the Chinese government eases rules for civil air traffic.

What Will It Take For China's Private Helicopter Market To Lift Off?

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Published July 14, 2014

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What Will It Take For China's Private Helicopter Market To Lift Off?