Infrastructure & Training Market Intelligence

FBO Facilities & Hangarage

by Global Sky Team

FBO Facilities & Hangarage

The Asia-Pacific region has seen a significant increase in its business jet and turbine helicopter fleet over the past five years. The number of business jets increased by 147 units, from 1,066 at yearend 2014 to 1,213 at yearend 2019, while the number of turbine helicopters increased by 781 units, from 3,592 in to 4,373 over the same period. These numbers are forecasted to grow due to the increasing population and net wealth in the region.

The rising business and general aviation fleet in the Asia-Pacific region is accompanied by increasing commercial passenger and cargo traffic numbers, which are both forecasted to grow exponentially in the coming years. The region is expected to see an increase of more than two billion annual passengers in the next 20 years – the largest growth of passenger traffic in the world. However, to be able to grow at the projected rate, Asia-Pacific countries need to resolve their aviation infrastructure bottleneck issues. Overcapacity and limited parking issues that plague the regional industry are a major challenge that needs to be addressed in the near future to ensure the continued growth of the Asia- Pacific aviation industry in general, and the business/general aviation industry in specific.

The lack of infrastructure support in the region affects the business and general aviation markets, which are often seen as playing second fiddle to the commercial aviation market, as the limited regional infrastructure – which is shared between the commercial and business/general aviation sectors – gives priority to commercial aircraft.

With the expansion of the fleet size, the demand for infrastructure support and parking space is increasing.

Lei Zhang, Marketing Director at Shanghai Hawker Pacific BAC

Due to limited slot availability for business aviation movements at airports, many operators opt instead for support services provided by Fixed-base Operators (FBOs). An FBO is a business aviation service provider that has been granted the right by an airport to provide services, such as: aircraft re-fueling, aircraft hangarage, light maintenance, and customs immigration, and quarantine (CIQ) services. These FBOs focus mainly on business/general aviation aircraft. As of November 2020, there were 72 Fixed Base Operators (FBO) in the Asia-Pacific region. This number needs to increase in the coming years to ensure there is enough infrastructure available to support the growing Asia-Pacific business/general aviation fleet.

The overcapacity issue at FBOs range in severity across the region. Of the 72 FBOs in the region, Australia is home to the most – 23. These Australian FBOs rarely face overcapacity issues and can comfortably serve the Australia business jet fleet – which stood at 199 units at the end of 2019. On the other side of the spectrum is Hong Kong – with only one FBO available to serve its fleet of 122 business jets (as of yearend 2019). Hong Kong thus faces severe overcapacity issues and is in dire need of new infrastructure.Lei Zhang, Marketing Director at Shanghai Hawker Pacific Business Aviation Centre in China, said in an interview with Asian Sky Group: “With the expansion of the fleet size, the demand for infrastructure support and parking space is increasing. The number of FBO and hangar facilities are expected to increase in the future and with the development of the industry, more professionals and services are required.”

The Future of the FBO Industry

2020s COVID-19 pandemic has hit the aviation industry hard, which witnessed a dramatic decrease in the demand and supply for air transportation due to the strict travel regulations imposed by countries, in an attempt to try and limit the influx of infected cases from foreign regions. The FBO business, which relies on flight activity, hardly saw any traffic in 2020. There is, however, still positivity regarding the future of the FBO business among industry professionals.

Lei Zhang from Shanghai Hawker Pacific Business Aviation Centre said: “The number of flights has decreased significantly compared to previous years. Although the business is affected by COVID-19 in the short-term, the long-term prospect of the industry is still optimistic.”

Although the business is affected by COVID-19 in the short term, the long term prospect of the industry is still optimistic.

Lei Zhang, Marketing Director at Shanghai Hawker Pacific

Rita Tam, General Manager at TAG Macau FBO, says: “The main challenges are the travel restrictions imposed by different countries and the restrictions on travelling. There has been a significant impact due to COVID-19; both commercial and business aviation flights have dropped in comparison with last year figures. But there is a lot of potential to open FBOs and hangars in the future, in particular China as they are the one to pick up the economy during the COVID-19 period.”

There is a lot of potential to open FBOs and hangars in the future, in particular in China as they are the one to pick up the economy during the COVID-19 period.

Rita Tam, General Manager at TAG Macau FBO

Despite the ongoing pandemic, the Asia-Pacific region witnessed two new FBO facility inaugurations in 2020 – by Bird ExecuJet at New Delhi’s Indira Gandhi International Airport, India in July and by Sino Jet at Nanchang’s Changbei International Airport, China in October. Additionally, Jetex, in collaboration with Bombardier, announced in October 2020, their plans to open a new FBO in Singapore to meet the growing demand for business aviation in the region.

With the Asia-Pacific business/general aviation fleet expected to grow in the future, companies and investors may feel that FBO business will inevitably bounce back as soon as the COVID-19 pandemic is over.

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