Asians may own as much as 20 percent of the global luxury jets fleet by 2017 as economic growth spawns new millionaires, said Singapore-based K.K. Yong, vice president of Jetsolution International Services Ltd. Southeast Asia will create the next wave of demand for private aircraft, benefiting General Dynamics Corp. (GD)’s Gulfstream, Embraer SA (EMBR3) and Textron Inc. (TXT)’s Cessna, the aviation consultant said.
Rising affluence in Southeast Asia, China and India amid a boom in mining and property projects is boosting demand for private jets to increase business flexibility and cut travel times, according to Jetsolution. The number of people in the Asia-Pacific region with at least $1 million in investable assets rose 1.6 percent to 3.37 million in 2011, RBC Wealth Management and Capgemini SA said in September.
“When people get wealthy they tend to buy what they wish to have eventually,” Yong said in an interview in Singapore on Jan. 7. “Demand for business jets is highly correlated to wealth creation, which is largely driven by economic growth in the region.”
As many as 15,200 business jets were flying worldwide at the end of 2011, with about 5 percent in Asia, Yong said, citing figures from Montreal-based planemaker Bombardier Inc. (BBD/B) The U.S. and Europe combined accounted for 58 percent of the total.
Business jets cost from about $17.2 million for Bombardier’s Learjet to about $50 million for Dassault Aviation (AM) SA’s Falcon 7X and more than $100 million for larger Airbus SAS or Boeing Co. planes outfitted as business jets.
The list price of an Airbus corporate jet, based on its A319 passenger aircraft, can be about $87 million with a typical cabin. Those planes, which typically seat as many as 19 people and can fly non-stop intercontinentally, have features such as lounges, offices, bedrooms and bathrooms.
Jetsolution, headquartered in Hong Kong, provides consulting services to private-jet owners in Asia and advises on aircraft acquisitions and sales. The company, established in 2009, gets three to five enquiries a day from potential clients, said Jackie Wu, president of Jetsolution.
The wealth in India, China and Southeast Asia may exceed the total in the U.S. and Europe by 2030, the Asian Development Bank said in May. Among the world’s top 100 wealthy individuals, 11 are Asians, according to the Bloomberg Billionaires Index.
“Wealth is moving to Asia, and there are lots of potentials especially in Indonesia,” Wu said. “We are still in the infant stage compared to the U.S. and Europe” in the private-plane market, she said.
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Singapore posted a 14 percent increase in millionaire households to 188,000 in 2011, when the Asia-Pacific region countered a decline in wealth in Western Europe and the U.S., according to a Boston Consulting Group report published May 31.
The proportion of millionaire homes in the city-state was 17 percent, the highest in the world, according to the report.
China’s high net-worth households, defined as those with at least $1 million, probably expanded 17 percent to 1.74 million in 2012 after increasing 30 percent a year earlier, according to a Dec. 20 report by Boston Consulting Group and China Construction Bank Corp.
Increased trade as well as development of resources and real-estate projects in Asia are driving demand for private jets as they require traveling to remote areas and flexible time arrangements, Wu said.
t seems that the global super-rich like their private jets on the bland side.
No matter if you’re the CEO of a Fortune 500 company or electronics tycoon from Asia, it’s likely a dark wood veneer and light-colored leather upholstery will envelop you in the lap of luxury at 38,000 feet.
Even the bright red and yellow livery of kung-fu superstar Jackie Chan’s new jet (that came with his role as “ambassador” for Brazilian plane-maker Embraer), gives way to a spotless interior of mid-tones and cream leather seats.
If it doesn’t seem to fit the persona of the martial arts actor, the companies that are fighting over the executive jet market are well aware that giving clients whatever they want, even if that is uniform luxury,