China Private Jet Sales Fall As Government Makes Anti-Corruption Push

Sales of business jets declined for a third consecutive year in China, thanks in part to President Xi Jinping’s government anti-corruption campaign, which has cut sales of big-ticket luxury goods across the world's second largest economy. The decline comes even as China opens its airspace to more private aircraft, making it easier for pilots to obtain private licenses and to approve flights. But inadequate infrastructure and rules limiting private-jet departures and arrivals have also put a dent in lofty business-jet sales projections.

“The industry has lost all business from government officials as well as state-owned enterprise executives. But the most critical factor is the lack of infrastructure,” Eric Wong, vice-chairman of NetJets China Business Aviation, told the Financial Times in a report published Tuesday.

China’s nascent market for business jets began taking off in 2009, peaking two years later at 55 purchases from Chinese firms, up from less than 10 in 2008, aviation data analytics firm JetNet reported. The growth led to predictions the country’s business-jet fleet would hit 350 by 2020.

But since 2011, sales have dropped, just 35 last year. China’s current business-jet inventory is about 350 planes, a sliver of the roughly 12,000 business jets that operate in the United States where 678 private jets were delivered in 2013.

China’s general-aviation fleet, which includes all noncommercial and nonmilitary aircraft, was about 1,600 planes at the end of 2013, according to China’s General Aviation Association, compared to nearly 300,000 planes in the U.S.

While China’s business-jet and general-aviation markets are small, private jet makers such as Dassault Aviation SA, Bombardier, Cessna and Gulfstream have seen the potential and have spent much of the past decade focused on growing their China businesses.

But aside from a crackdown on business-jet travel for Chinese politicians and executives of state-owned enterprises, China’s rules aimed at mitigating the high levels of traffic at the country’s major aviation hubs hampers business-jet travel. In most cases, it makes more sense to simply fly business class.

Private jets can only arrive or depart one time per day between 8 a.m. and 10 p.m., which means executives flying round trip from a major hub must arrive or depart during off hours. While similar restrictions apply to busy U.S. airports, smaller airfields nearby are typically available. In China these options are limited.