Private Jets Fly Into Southeast Asia

But much of the excitement revolved around something smaller, at least compared to the Dreamliner: private jets. Among the models parked for display were Embraer’s Lineage 1000, a 19-seater, five cabin plane that’s still bigger than many studio apartments in New York, with space for a full living room and 32-inch television, all for the bargain price US$53 million.

Indeed, companies like Embraer, Bombardier and Hawker Beechcraft are increasingly targeting Asian business executives for their jets, and while tapping the vast amount of wealth in China and India is crucial, they are also increasingly interested in piggybacking on Southeast Asia’s growth to sell their wares. Embraer recently sold its first Lineage 1000 in Indonesia recently, with an undisclosed customer from the country purchasing the US$53 million jet in late 2011.

Smaller executive jets are also particularly useful in Indonesia, executives say, where the vast network of islands and a still-patchy network of commercial airline services make private jets not just a luxury choice but a viable business option. According to Hawker Beechcraft’s research, 48 business aircraft were sold in Indonesia between 2006 and 2010, almost 270% more than the 13 aircraft delivered in the five previous years. The company has also sold two Hawker 900XP jets to Indonesia’s Lion Air, partnering with the increasingly prominent airline to provide private jets to high net worth individuals.

While the U.S. has long been accustomed to seeing its chief executives jet around on their business planes – with infrastructure at airports across the country to house and service those planes – Hawker Beechcraft says the industry is actually healthier in Asia. One way of analyzing the market, they say, is by measuring how many businesses and individuals are looking to sell their planes – a sign that buyers can’t afford them. According to Hawker Beechcraft, only 7% of pre-owned business planes are for sale in Asia, compared with 12% in North America and 16% in Europe.

“We see Southeast Asia, India and China all as growth opportunities,” said Sean McGeough, President of Hawker Beechcraft for Asia Pacific and India in response to questions from the Wall Street Journal, adding that Indonesia was a “strong” market for business jets last year.

Those in the executive jet business admit that obstacles still remain to seeing more private jets take off across Asia. Infrastructure remains especially weak in many Southeast Asian airports, which in some cases are barely equipped to land the recent growth in large commercial aircraft, much less a big increase in private air travel.

In Singapore, at least, some airports are taking measures to address this. Seletar Airport, Singapore’s first international airport and once a Royal Air Force station, plans to improve its facilities focusing on the maintenance and repair of private jets in expectations of increased private air traffic.

Other countries, especially Indonesia, have struggled to develop enough new infrastructure to keep up with aviation demand – or even with the demand for pilots. Then again, for just a few million dollars more, the latest jet shoppers could also just build their own airports, if needed.

By: Shibani Mahtani, from: http://blogs.wsj.com/searealtime/2012/02/20/private-jets-fly-into-southeast-asia/?mod=WSJ_SEA_Blog