Used private jets from China are landing with U.S.
buyers
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[November 08, 2018]
By Allison Lampert and Stella Qiu
MONTREAL/ZHUHAI, China (Reuters) - Chinese
companies and individuals are selling more used private planes than in
previous years as economic growth slows in China, and U.S. buyers are
snapping up hard-to-find models, according to interviews with business
jet analysts, dealers and consultants.
"Luxuries like private jets are often the first things to be parted with
as the companies can no longer afford or justify them," said James Coak,
vice president of international business development for Titan Aviation.
So far this year, 15 of 268 business jets operating, based or registered
in China have been sold outside of the country, compared with an annual
average of 10 from 2014 to 2017, according to FlightAscend Consultancy
data.
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Total used sales from China are expected to reach about 20 this year,
FlightAscend senior valuations analyst Daniel Hall said.
Half of this year's sales so far have landed in the United States, Hall
said, where a sluggish business jet market in the aftermath of the 2008
financial crisis is turning around partly due to more favorable U.S. tax
laws for corporate aircraft ownership.
The uptick in U.S. demand has coincided with a decline in business
optimism by private jet operators, owners and financiers in China,
according to a survey by Hong Kong-based business aviation specialist
Asian Sky Group.
"My email is full of advertisements from brokers or inquiries from
owners every day with aircraft for sale," Jackie Wu, president of Hong
Kong-based private jet consultancy JetSolution Aviation Group, said in
an email.
Wu has seen a near-23 percent rise in sales from Greater China
year-to-date, compared with the year-ago period, she said.
The biennial Airshow China, the country's largest, runs this week in the
coastal city of Zhuhai, where Gulfstream and other planemakers are
looking to sell new jets.
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![](../images/110818pics/2018-11-08T113633Z_2_LYNXNPEEA70I0_RTROPTP_4_HONGKONG-AIRPORT_small.JPG)
Business jets (foreground) park at Hong Kong International Airport,
China October 19, 2018. REUTERS/Bobby Yip
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Among pre-owned Chinese planes recently sold, according to FlightAscend, are
younger Gulfstream models such as the popular large-cabin G550, which can fly
nonstop from Shanghai to Los Angeles.
Reuters could not determine the identity of the sellers or buyers.
Only 5 percent of the G550's worldwide fleet of 556 aircraft is for sale,
according to data from Asian Sky Group. Typically, 6 to 9 percent of some 21,284
business jets worldwide can be found on the secondhand market, where dealers say
the supply of pre-owned planes overall is shrinking, helping to prop up values.
Reuters could not determine prices for second-hand G550s, but according to
industry data cited by JetSolution, the market price for a 10-year-old
Gulfstream G450 is around $11 million compared with a $38.9 million list price
in 2008.
According to FlightGlobal Values Analyzer data, business jets have lost an
average of 7.1 percent in market value over the year. By contrast, business jets
depreciated 11.6 percent from 2016 to 2017.
Last month, Reuters reported that cash-strapped Chinese conglomerate HNA Group
Co Ltd [HNAIRC.UL] was selling its corporate "Dream Jet" sporting a "seven-star"
hotel-style cabin.
(Reporting by Allison Lampert in Montreal, Stella Qiu in Zhuhai and Jamie Freed
in Singapore; additional reporting by Eric M. Johnson in Seattle; Editing by
Tracy Rucinski and Richard Chang)
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