Sunday, December 28, 2014

Private jet market in China hurt by anti-corruption drive

The private aircraft market in China saw significant growth in 2013, but the trend will slow down as more buyers have been withdrawing orders for business jets as a result of the government's heightened anti-graft campaign, a Chongqing Youth News report says.

There were 248 business jets in China in 2013, up 28% from 2012, according to estimates shared by an unnamed Hong Kong-based airline. Yet several companies have recently canceled orders for jets, an industry insider said, adding that a third of the orders for business airplanes have been canceled this year, the report said.

This is perhaps a result of the "Zhao Benshan effect," or a reaction to the government's anti-corruption drive, according to the report. Zhao Benshan, a renowned entertainer in China, bought a Challenger series business jet from Canada's Bombardier Aerospace for 200 million yuan (US$32 million) in 2009, and later asked if he could return the jet in September that year after he was hospitalized with a heart problem. He later gave up the idea after learning that he would incur huge losses if he returned the jet. Zhao took delivery of the jet that can seat 17 passengers in April 2010.

Earlier this year, as Zhao denied rumors that his family has emigrated abroad, he reportedly said he can donate what he has to the country if necessary, including the jet. Following Zhao, enthusiasm among wealthy Chinese people to own a private jet has been dampened.

Statistics showed that in 2013, 42% of wealthy Chinese responded to a survey saying they plan to buy a private jet. That figure dropped to 29% this year, but is still higher than the global average of 23%.

China's anti-corruption drive has led to a drop in the sales of such jets, an unnamed industry insider said, adding that sales are expected to grow in the future after the campaign ends.

- Original article can be found at: http://www.wantchinatimes.com

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