GAMA NEWS Apr 15, 2015 19:26:26 GMT
Post by Annette (Admin) on Apr 15, 2015 19:26:26 GMT
Gama Aviation Set To Start China Managed Fleet
by Ian Sheppard
- April 13, 2015, 7:40 AM
Gama Aviation (Booth P706) is preparing to start its Asia Pacific aircraft management joint venture, with the first two customer aircraft to be based in Hong Kong, taking its global managed fleet to 146 aircraft. The development follow’s the Farnborough, UK-based company’s announcement in January that it had reached an agreement with Hutchison Whampoa (China) Limited (HWCL).
Speaking with AIN as he prepared to board a flight to Shanghai on Sunday, Gama CEO Marwan Khalek said the first two customers had been secured for managing “heavy metal” long-range private aircraft, while ABACE would provide an important opportunity for publicizing the new offering to other potential customers. “We also need to know where potential customers want us to be,” he said. “But we do want to be in mainland China.” Khalek said the focus would be on private owners so it would not be necessary for Gama to obtain an air operators certificate (AOC) straight away.
Gama has been particularly proactive in the business aviation market over the past couple of years, working to operate for Wheels Up in the U.S. and soon also Europe as well, merging with Oxford-based Hangar 8 last year–creating a company with a market capitalization of around £130 million ($200 million)–and expanding its network of FBO and maintenance facilities to include Sharjah, UAE, and Glasgow, Scotland.
Khalek said that “everything Gama will do in Southeast Asia will be through our joint venture, Gama Hutchison,” with the two initial managed aircraft being managed through Gama Aviation Hutchison (Hong Kong) Limited. He added, “Our plans are not secret and we’re trying to replicate our it throughout the world.” The Gama strategy, Khalek said, is to establish aircraft management services first, and later secure FBO/maintenance assets. This is what it did in the Middle East, ultimately setting up a facility in Sharjah.
“You don’t need the infrastructure on the ground to start, but the next step will be to look to set up a maintenance facility though we already have a cooperation agreement with FIC in Beijing,” said Khalek. “We are growing all parts of our business as aggressively as we can.” With its regional base in Hong Kong it is moving to bigger offices out at the airport soon, from its initial city-center office.
Gama has many years of experience operating aircraft in the Asia Pacific region and worldwide, but it had been cautious about getting involved too quickly. “I think I’m on record as saying I never saw the China market as being somewhere that the rewards will be instant–sometimes growth will be slower than we expect,” he said with respect to the current slowdown in the market. “The market is maturing here and the understanding is improving.”
Gama Aviation’s market research in the region revealed that China experienced “an incredible 460-percent” increase in deliveries of business aircraft comparing the 2010 to 2014 period with the earlier 2005 to 2009 period. Asia Pacific as a whole experienced 42.3-percent delivery growth between the two periods–714 units versus 501. “In contrast to this,” noted the Gama research, “the number of aircraft delivered globally contracted by 21.7 percent between these two time periods.”
“The business aviation market in the Asia Pacific is enjoying strong growth,” Khalek noted, “and it is being led by China, [which] now has the second-biggest fleet size in the region behind Australia [382 versus 738] but it is predicted to be the third largest market in the world by 2022.”
Other research carried out by Gama shows that it is a “seller’s market” with only 6.4 percent of the Asia Pacific business aviation fleet being up for sale at present, “compared with 8.4 percent of the global fleet.” It said that anything under 10 percent “generally means that demand for buying business aircraft is greater than the percentage of owners who are looking to sell, implying that the sector is set for further growth.”
The company’s research also highlighted that the Asia Pacific fleet is relatively young, at an average 16 years, which compares with 21 in North America and 22 years globally. Hong Kong has the youngest fleet, averaging six years, “closely followed by China, with seven years,” said Gama. New Zealand and Japan have the oldest fleets, with averages of 23 and 22 years, respectively.