Private jets: China's new status symbol

(Ecns.cn) -- An increasing number of wealthy Chinese people are trying to acquire private jets despite stringent regulatory and infrastructural barriers, according to the Southern Weekly.

The government has allowed individuals to own and fly private aircraft since 2003, but 10 years ago a personal jet was only a dream for even the richest mainland Chinese. That is no longer the case.

In March of this year, China's first private plane 4S shop opened in Zhuhai, Guangdong Province, and sold 14 planes in the first week. With demand heating up, the company plans to open 40 more stores in other cities.

According to a survey of China's richest people released by the Hurun Report at an aviation conference in Shanghai, 13 percent of Chinese with personal assets over 100 million yuan (US$15.8 million) plan to buy business jets.

Tough rules

On March 26, 2012, a private jet adorned with two dragon-shaped patterns was put on display at the Asian Business Aviation Conference and Exhibition at Shanghai's Hongqiao Airport. The owner of the plane was Hong Kong superstar Jackie Chan, the Southern Weekly reports. 

The plane was a Legacy 650, a business jet purchased from a Brazilian aerospace conglomerate that produces commercial, military and executive aircraft. Chan is currently the company's ambassador to the Asian market.

Among Chinese celebrities, Chan is not the only one with a private airplane. Others include comedian and actor Zhao Benshan, singer-songwriter Jay Chou (Zhou Jielun) and actress Zhang Ziyi, each of whom own business jets valued at more than US$10 million.

Jackie Chan's Legacy 650 has a market value of 200 million yuan ($31.6 million) and a range of 7,223 kilometers, allowing it to fly non-stop from Beijing to Dubai.

According to statistics provided by U-jet magazine to Southern Weekly, there are currently some 3,000 private airplanes in China.

However, not all private airplanes are business jets, which carry a price tag of more than US$10 million and fly at the same altitudes and speeds as commercial airplanes.

Of those business jets, only 100 fly more than 0.8 hours a day, in contrast to the 9.5 hours of average daily flying time for commercial airplanes – figures that are insignificant compared to the 200,000 private airplanes and 15,000 business jets in the U.S.

The main reasons are tough aviation regulations and infrastructural barriers. In China, individuals with private jets must be licensed, the plane must have a certificate of airworthiness from the Civil Aviation Administration and its flight plans must be approved by both the Civil Aviation Administration and the air force.

Approval of a flight plan is the most difficult to obtain, leading many aircraft owners to risk fines of 100,000 yuan (US$15,780) to fly, revealed Zhu Songbin, a businessman from Wenzhou, Zhejiang Province, who hopes the government will consider easing regulations for private airplanes.

Hungry for status

Wealthy Chinese are not prone to sticker shock when shopping for luxury cars or private jets. In fact, according to the Southern Weekly, most of them have a similar response after hearing the price of an airplane: it's so cheap!

They always ask for the most expensive models, even if they won't be able to fly them often, because private jets are symbols of status.

Furthermore, prices of business jets are increasing, so they are good investment choices by value, said Wang Xinyu, a salesperson at a business jet firm.

Last year, Zhao Benshan rented out his private jet for US$10,000 per hour. It was an unexpected move that revealed one of the many benefits of owning an airplane.

The World Journal, a Chinese-language newspaper headquartered in New York, recently predicted that China's business jet market will undergo a period of rapid growth despite complaints from buyers, and that in 10 years the number of private airplanes here may even exceed that the United States.

VIP service

Between Terminal 2 and Terminal 3 of the Beijing Capital International Airport there is a two-story building nicknamed the "business jet building."

According to Ren Yong, a staff member there, only a limited number of people in China can use it. For business jets, only three cities – Beijing, Shanghai and Shenzhen – have such facilities to provide premium services, he added.

A security line specially designed for business jet passengers leads from the building to the planes. In 2008, Rupert Murdoch was the first person in Beijing to use it.

With the business jet market growing rapidly, three such terminals are no longer enough to satisfy China's needs, and cities such as Tianjin and Dalian are now constructing their own.

Without such facilities and corresponding services, a city cannot be described as international, said Ren.