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Gulfstream Sees China Private-Jet Rebound as India Trails
China’s private-jet market will rebound next year after a leadership transition in the ruling Communist Party while business aviation falls behind in India, the chief of General Dynamics Corp. (GD)’s Gulfstream unit said.
China is building about 10 airports a year and easing flying restrictions to spur demand, Gulfstream President Larry Flynn said yesterday in an interview. He said sales waned before the country’s once-a-decade power shift, which gets under way with a Communist Party congress starting Nov. 8 in Beijing.
“They’re waiting on the new government in China, so our Chinese orders were down this year from last year,” Flynn said at the National Business Aviation Association conference in Orlando, Florida. “The new government gets installed, people go back to normal business, you’ll see more orders out of China.”
Gulfstream’s role as a producer of private jets such as the long-range G650 gives it a perspective on plane sales inside and outside the U.S. Official support for corporate aviation in China will help the industry expand more quickly in the world’s most-populous country, Flynn said.
“They’re importing airplanes as fast as they can. They’re building airports as fast as they can. And the restrictions have been lessened,” Flynn said. “I see that trend continuing. They’ve been great to work with.”
“India does not have near the commitment that China does. The infrastructure is slower. The import process is slower,” Flynn said. “India is falling farther and farther behind.”
Emerging markets led by China will post growth in aircraft demand that outpaces the U.S. and Europe, according to a study by Honeywell International Inc. (HON) released before the business aviation conference this week. The number of jets in China will increase an average of 30 percent annually over the next five years, according to Honeywell.
Gulfstream builds planes for private buyers as well as for government uses, such as aerial reconnaissance and transportation of dignitaries. Parent General Dynamics is based in Falls Church, Virginia.
China, though promising, is now a difficult market in which to operate corporate jets, said Claudio Galdo Camelier, vice president of market and product strategy for Embraer SA (EMBR3)’s executive jet unit. Business aircraft now are usually reserved for company owners and often fly to international destinations rather than within the country, he said.
“In China, general aviation is almost nonexistent,” he said. “ There aren’t very many airports where you can fly with the airplane. Lack of pilots is a big issue in China.”
The government has stepped up its effort to build more airports and relax restrictions, such as having to file a flight plan a week in advance, he said at the conference. Embraer is based in Brazil.
Cessna is laying groundwork now to sell more planes as China’s aviation market matures over time, said Scott Ernest, CEO of the company, a unit of Providence, Rhode Island-based Textron Inc. (TXT) The company signed joint venture agreements in March with Aviation Industry Corp. of China to provide aviation service and plane manufacturing in the country.
As part of the agreements, Cessna will build some Caravans, the company’s large, propeller-driven airplane, in the U.S. and finish the interior and painting in China, he said.
“If you’re going to sell in China, it’s a good thing to be in China,” he said. “You have to progress through the learning curve and we’ll see where that goes down the road.”
While the Caravan is a workhorse plane that can land and take off in tough conditions, Chinese customers also are showing interest in Cessna’s larger jets, such as the Citation Sovereign, Ernest said.
“There’s a tremendous amount of successful businesses in China and that’s who we sell our product to.”
To contact the editor responsible for this story: Ed Dufner at email@example.com