China's charter jet companies have been faced with jet-setting consumers who are showing an increasing tendency towards renting private planes instead of purchasing their own, as President Xi Jinping's anti-graft campaign has curbed enthusiasm towards flashy displays of wealth. However, new research by Global Jet Capital, reported by The Wall Street Journal, shows a different side of the story.
In the last five years, affluent Chinese consumers have spent four times more on private jet purchases than they did in the five years prior, to the tune of US12.75 billion. Additionally, with Chinese tycoons increasingly setting their sights on scaling their companies internationally, many of these 255 private airplanes are used less as prestigious toys than as functional tools for transporting large groups of people for business.
The trend away from conspicuous consumption and towards practicality means jet buyers are less concerned with newness and more focused on getting good value. Approximately half of the jets purchased last year in China were secondhand, the managing director of jet broker Asian Sky Group told WSJ.
Even though the numbers are rising—albeit slowly—China's jet market is still way behind that of the United States, and the anti-graft campaign wasn't the only obstacle to growth. China's aviation regulations have made it difficult for international companies to move into China, as the “low” airspace usually occupied by private jets is primarily reserved for military operations. In recent years, though, China has been playing catch-up with the United States, where there are currently around 10,000 active private jets. Regulations have been loosened slightly, and greater attention has been given to providing the aviation infrastructure required for private jet operations. WSJ reported that in a more recent bout of progress, the Shanghai Airport Authority president announced at the Asian Business Aviation Conference and Exhibition in April that Shanghai would build an airport for business jets, which would be China's first.
Given this opportunity, private jet operators are working to maximize their client base by making transactions and services as convenient as possible for customers. For instance, last month VistaJet launched a service last month allowing clients to book private jets via WeChat, and has also been tailoring its charter jets to meet Chinese tastes through food offerings and language services.