Hainan's Deer Jet leading China's rapid business aircraft expansion

Hainan Airlines subsidiary Deer Jet Co. said it plans to grow its business aircraft fleet from 23 to 35 by year end to take advantage of China's fast-growing commercial business aviation market.

"Despite the global financial crisis's impact over the past two years, the domestic business aviation market is experiencing fast growth owing to China's rapid GDP growth," Deer Jet Assistant President Zhao Hui said. He revealed that the company's operating revenue increased 21% in 2008 followed by 32% growth in 2009, although he did not disclose the exact revenue figure. "We expect our revenue will jump 60% this year," he said. "Also it is noteworthy that in the past our clients were mainly global corporations but these days domestic clients are increasing and they now make up 80% of our total clients."

Deer Jet's fleet expansion this year will be comprised of ACJs. Launched in 1995, the Beijing-based firm's fleet is composed of one BBJ, one A319, three Gulfstream 550s, two Gulfstream Vs, four Gulfstream IVs, four Gulfstream 200s, one Hawker 900XP, two Hawker 850XPs, four Hawker 800XPs and one Hawker 4000.

Francois Chazelle, Airbus VP-executive and private aviation, commented that China is an untapped business aviation market with big potential. Currently, the total business jet fleet in mainland China, Hong Kong and Macau numbers barely more than 50. Chazelle said Airbus has 20 business aircraft on order for delivery to the country.

In addition to HNA, other Chinese airlines have launched business jet companies including Air China, Shanghai Airlines, Shandong Airlines, Sichuan Airlines and China Eastern Airlines.

It was not until the mid-1990s that business aviation broke into the Chinese market, and it has developed slowly in large part because business jets are taxed more than commercial transports and largely have been viewed in Chinese society as a high privilege restricted to the super-wealthy.

But aviation experts in China believe that those conditions are changing and that business aircraft increasingly are becoming an acceptable means for Chinese executives to travel the vast country. It is estimated that China will need 300-600 business jets in the next 10 years.