Shared-jet option for China’s newly wealthy

Shared-jet option for China’s newly wealthy

With the rapid development of China’s economy and accumulation of personal wealth, traditional transportation such as civil airliners and high-speed railways are no longer sufficient for business people. Business and private aviation is increasingly emerging as an option for the wealthy.

There are already more than 20 domestic business aircraft operators in China, with fleets ranging from one or two aircraft up to a few dozen. Generally, these operators are offering fairly straightforward aircraft management and charter options.

However, there are alternatives to full aircraft ownership and charter. “If you do not want to buy an aircraft and charter is too expensive for you, there is an option similar to fractional ownership which is popular in the West,” said Xuefeng Li, president of Freesky Aviation CAEA Aviation. Private Plane Club, a shared-use service where members purchase the right use the whole fleet.

For a 30 million renminbi ($4.8 million) membership fee, each flight will be charged only at cost, although the company will charge an additional service fee accounting for 10 to 15% of the flight cost.

Xuefeng points out that on top of the purchase price of an aircraft there are taxes and operating costs and the residual value of the aircraft could decrease. With charter there is no investment risk, but the unit price per flight can be higher. Xuefeng believes the average aircraft usage cost is lower under the “club” mode as after the membership fee is paid, the costs per flight hour are low.

Freesky has more than 40 members and to maintain exclusivity, the club will limit members to 200. What remains to be seen is whether China’s emerging jet-set will be willing to share aircraft or prefer to retain full control of their investment.

Source: World Flight magazine published by World Flight Ltd

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