BEIJING/SHANGHAI (Reuters) - China’s private jet market faces a protracted lull as the economy continues to slow down, salesmen and aviation lawyers said at forum in Beijing this week, predicting the country’s uber-rich will sell off jets in droves next year.
“Whether it is as a manufacturer, a leasing company or an operator, we all feel a chill,” Xu Lidong, chairman of HNA Group Co Ltd’s private jet division Deer Jet, said at the Beijing event, citing the broader economic malaise.
China’s economy expanded in the last quarter at the weakest pace since the global financial crisis, with economists forecasting more headwind to come amid a years-long campaign to tackle debt risk and spiraling trade war with the United States.
Dealers and brokers at the 2018 China Business Aviation Development Forum echoed the sentiment.
“For the past 10 years, it’s been all about Chinese business owners buying; but this year, we have so far handled 3-5 cases where jet owners wanted to sell to overseas markets,” Wang Shu, a partner at Han Kun Law Offices.
Deer Jet’s Xu said there are currently over 30 aircraft up for sale from Greater China, with used private plans from China being snapped up by U.S. buyers.
“The U.S. market is having its best run in a few years,” said Wang Fuhou, president of the aircraft leasing division at Minsheng Financial Leasing. He said that contrasted sharply with the situation in China.
“I wouldn’t say (this year) is the worst, though. The next year or the year after will be the worst.”
Some speakers at the event forecast a pickup - but not until around 2020.
For Lily Jet, a charter company operating in China for the past decade, the golden days when the charter market recorded annual growth of 30 percent are well gone.
“Profit is drastically down this year,” said Ding Lili, general manager for business, adding the firm had cut prices by about a quarter for one of its most luxurious jets.
“Against such a backdrop, I understand why jet operators are reducing their fleets significantly.”
Reporting by Stella Qiu in BEIJING and Adam Jourdan in SHANGHAI; Editing by Christopher Cushing