Executive Lifestyle
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And so they were - in the early 90s when Asia was booming like never before - but then it all changed, overnight, by the time of the 1997 financial crisis.
'There were something like 30 to 40 private jets in Asia in the 90s, before the recession. And then overnight, they were all sold off,' recalls Logan Ravishankar, owner of MyJet Asia, who has been in the private charter industry for almost two decades.
It's taken a while, but private or executive jet-setting days are slowly but surely coming back again - not so much as a luxury (although there's still a market for that) but as a business tool.
Singapore-based operators like MyJet and Executive Jets Asia are hoping that the business advantages in owning a private jet, or chartering one, will start to take wing among businessmen and companies in the region.
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Not so much in Singapore where the businessmen are more conservative, they say, but the buzz is in other countries like Malaysia, Indonesia, the Philippines, Hong Kong and the two upcoming economic giants, India and China.
Post-9/11 and in an economic environment that's picking up pace, these operators are talking up the business edge of having your own jet.
'In Europe, top directors are asking, why doesn't our company have a private jet since other companies have them,' says Mr Ravishankar. 'Over there and definitely in the US, it's recognised as a business tool. It also gives a boost to the company's image,' he adds.
In Asia, the prevailing sentiment around private jet ownership or usage is still one of 'luxury'. There are stories of wealthy individuals who take off on a whim, like the 40-year-old woman who chartered a plane for herself and 10 friends to a holiday resort for a weekend just a couple of weeks ago. The price tag for the ride? A cool US$70,000.
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But, as Prithpal Singh, principal aviation consultant of Executive Jets Asia, points out: 'The whole aspect of private jet ownership today is based on the simple fact that time is money.' Time is a big deal in the US and Europe, so executives like the idea of getting from point A to point B quickly and seamlessly without having to queue at immigration or customs, or having to wait for connections and sit through possible cancellations or security scares.
'But here, time isn't so expensive yet. Until a few years ago, a CEO earned half a million a year, now he or she might earn $1.5 to $2 million, so there's now greater value placed on the individual's time,' Mr Singh adds. He notes that second-generation scions taking over their father's businesses are 'ripe' for private jet ownership. 'Because they're more savvy and enlightened, and they understand that time is precious.'
The general concept is that private jets are a luxury, but when it's used in a smart way, says Mr Singh, it's an efficient tool, and one which guarantees confidentiality as well.
Mr Ravishankar, a former corporate jet pilot, agrees. The sole owner of MyJet Asia, which mainly manages chartered flights, points out that business has picked up in recent years due to the lack of security in the region. 'During the riots in 1997, we were the first option for many MNCs for plane charters, getting their staff out of places of unrest,' says Mr Ravishankar.
He flew some 1,900 people out of various countries that year. During last year's tsunami disaster, he also chartered a Malaysian Airlines' 747 to get people in and out of the disaster areas which were not accessible to commercial planes. And then, of course, he's flown soccer teams and superstars and royal family members for a whole host of events.
But staying on the private jet ownership track, Mr Ravishankar is very optimistic about its future. 'There were five private jets sold in Malaysia in the last two months,' he says. 'The corporate aviation business has easily grown 30 per cent in the last two years, with a lot of private jets coming from the US and Europe into Asia. In Shanghai, you can sometimes see 10 to 12 private jets parked at the airport on a daily basis, and five to six, in Hong Kong, on average.'
If you're wondering who flies by private jet, corporate executives take up 60 per cent of MyJet's business, while leisure travellers, which include European clubs conducting their Asian soccer tours, superstar or royal family visits, make up the rest.
'Our chartered service growth - most of which is US or Europe-based - is based on what's happening in the world,' says Mr Ravishankar. People look for three key things when they fly private, he notes. 'It's the flexibility, convenience and also confidentiality.'
And what's the premium on time saved and convenience? One can't compare that to the cost of a commercial flight, says private jet advocates. Mr Singh points out how new airports in Asia are now located hours outside of the city centres, plus airlines are now requiring passengers to check in earlier - which is all adding up, time-wise.
'But when you fly a private jet, the airports where you land tend to be the old airports which are closer to the city,' he says, citing Subang in Kuala Lumpur and Halim in Jakarta as examples. Flying on a private jet will always be more costly than commercial flights - roughly 10 to 12 times more. Long range flights can go for US$8,000 an hour, while smaller regional air flights go for US$3,000-$4,000 an hour.
But the time savings are tremendous, not to mention the queue-less check-ins and immigration because part of the private jet service means it's all done for you. That's why a Malaysian businessman Mr Singh knows has two jets now - one for himself and the other for his top managers - to fly to more remote locations in East Malaysia and Indonesia.
You may not have US$3 million to spare, but you really want to own a jet. To help interested executive jet owners take a step towards their dream, Singapore-based Executive Jets Asia (EJA) has launched what's known as 'fractional ownership' - a little bit like airplane time-share, where six buyers pay US$500,000 each for a jet.
'The Asian market is a very young market. Most people don't have the money or the inclination to own a jet fully by themselves,' says Mr Singh. Even if the millionaires could afford a plane, the responsibilities of maintaining an aircraft are rather onerous, especially if they're not going to chalk up the 500-600 hours a year to justify full ownership. 'Most businessmen's usage is going to be 100-200 hours a year,' he says.
The size of a private jet ranges from four to 13 seats - definitely less than 20 seats. Marc Adler, senior vice-president and CEO of Guam-based ShareJet ACI, a partnership between America's ACI Pacific and a Japanese group to market the Boeing Business Jet to corporate executives travelling to the Asia-Pacific region, says that advertisements for the sale of private jets placed in the regional press yielded at least three enquiries.
'That's a good result,' he says. 'The callers were exploring, and not what you'd call aircraft-savvy, so whether they'll turn into sales we don't know yet. But I think they're gauging how to best benefit from a business standpoint.'
Buyers either look for craft for long-range travel or regional because you'd want to match the aircraft with its 'mission'. With the lower US dollar now, the dollar-denominated aircraft is now more reasonable, so there is potential for sales.
'With the strengthening of the Asian financial markets now, more people are seeing increasing disposable wealth,' says Mr Adler. However, more importantly, there's now broader public acceptance that a private jet is seen as a business tool that enhances productivity and creates shareholder value. He sees 85 per cent of private jet usage to be for corporate reasons.
Besides managing private jets, ShareJet is known in the industry for its long-range charters using Bombardier Global Express planes which have a typical 12-13 hour flight range. 'A typical mission would be flying from Tokyo to New York, non-stop,' he says. He sees demand going up for shorter-range regional trips as well, with a strong case for basing jets in Kuala Lumpur, for instance.
To get an idea of the private jet business, ShareJet, which has been in the region for a few years, typically flies 50-70 hours a month; 820 hours a year. 'Which is a lot. It could be one customer, or two or three charters. What we're finding out is that we're now turning down charters, so we might be getting additional aircraft,' says Mr Adler.
He points out that there have always been private jets in the Asia-Pacific region, with the numbers dipping as low as 160 plus in the late 90s. Since then, they have been increasing, and there are now about 240 private jets in the Asia-Pacific region. ShareJet, for instance, manages two - a Gulfstream 550 and a nine-seater Global Express. It's looking to add another Global Express or a Challenger 604 to its fleet.
With the corporate flight business in Asia-Pacific making up only 3 to 4 per cent of the worldwide corporate jet business, he says, even with the growth rate of 10 per cent a year, there's plenty of scope out there. This depends on the economy stabilising, however, and high fuel prices are not helping the situation. 'In a downturn, the aircraft is the first asset to go,' points out Mr Adler frankly.
Mr Ravishankar says Singapore is lagging behind other cities - especially Hong Kong, with Dubai fast-catching up - as a private jet hub because it's not as sensitive to the needs and changes in the market as it was before.
'Plus, Singapore businessmen are still pretty conservative and aren't very exposed to the benefits of private jets yet, compared to their Malaysian or Indonesian counterparts,' adds Mr Singh. On top of that, Singapore's Fortune 500 companies are usually government-linked corporations which can't afford to be seen to 'indulge' in private jet acquisitions. 'Singapore has to change its thinking, especially if we're going to get the Integrated Resort, because there must be a selection of jets which are available to the high rollers and businessmen,' he adds.
With Singapore keen to be an aviation hub, private jet operators see the need to have the full spectrum of aviation activities. Now that Singapore has its commercial and low-cost budget flights operating smoothly, there's room for business aviation to flex its wings.
'Owning a private jet is very much like owning a car,' says Mr Singh. 'When you don't have one, you don't miss it. But once you've had one, you can't do without it.'
It's just a question of time before Asian businessmen realise the benefits of jetting around at their convenience.
