ASIA-PACIFIC BUSINESS JET CHARTER REPORT 2018

Transcription

1 ASIA-PACIFIC BUSINESS JET CHARTER REPORT 08 SUMMER 08 CHARTER REPORT I

2 Beijing Shanghai Shenzhen Hong Kong Singapore ABOUT ASIAN SKY GROUP ASIAN SKY GROUP (ASG), headquartered in Hong Kong with offices throughout Asia, has assembled the most experienced aviation team in the Asia-Pacific region to provide a wide range of independent services for both fixed and rotary-wing aircraft. ASG also provides access to a significant customer base around the world with the help of its exclusive partners. ASG provides its clients with the following business aviation services: Sales & Acquisitions Market Research and Consulting Operational Oversight Luxury Charter Services The acclaimed Asian Sky Fleet Reports are produced by ASG s market research and consulting team, in collaboration with Asian Sky Media a branch of ASG focusing on media and publications. Asian Sky Media has a growing portfolio of business aviation reports designed to provide valuable information to readers for a better understanding of the market. Included in the portfolio is the Asia Pacific Fleet Reports for both civil helicopters and business jets. Asian Sky Quarterly provides a reader-friendly look at market dynamics within the pre-owned markets of civil helicopters and business jets. ASG s reports include the Asia Pacific Business Jet Charter Report, the Asia Pacific Training Report, the Asia Pacific Infrastructure Report and China General Aviation Report focusing on specific industry segments showcasing the current status and challenges of the industry. DISCLAIMER The information contained in this report is for reference only. While such information was compiled using the best available data as of June 0, 08, ASG makes no warranties, either expressed or implied, concerning the accuracy, completeness, reliability, or suitability of such information. ASG is not responsible for, and expressly disclaims any and all liability for damages of any kind, either direct or indirect, arising out of use, reference to, or reliance on any information contained within this report. CONTRIBUTION ASG would like to acknowledge the gracious contributions made by numerous organization, including aircraft operators, charter brokers, aviation authorities and JETNET LLC in providing data for this report. Special thanks to Air Charter Service ( and Phenix Jet (charter@phenixjet.com) for providing market insight. And thank you to Conklin & de Decker Associates for supplying images used in the Popular Models for Charter. Should you wish to reproduce or distribute any portion of this report, in part or in full, you may do so by mentioning the source as: Asian Sky Group, a Hong Kong-based business aviation consulting group. For information about our aviation services, please contact: sales@asianskygroup.com or visit For information regarding ASG publications, please contact: media@asianskygroup.com or visit CONTACT Suite 0, /F, Fortis Tower, Gloucester Road, Wan Chai, Hong Kong Telephone +8 9 Facsimile II SUMMER 08 CHARTER REPORT

3 CONTENTS 0 PUBLISHER S NOTE POPULAR CHARTER FLIGHT ROUTES 0 EXECUTIVE SUMMARY INTERVIEW: SHENZHEN FUNIAN BUSINESS AVIATION CO., LTD 0 MARKET OVERVIEW 6 COUNTRY PROFILES FACTORS IMPACTING CHARTER 9 CHARTER FLEET BY OEM REGULATIONS CHARTER MOBILE APPS 6 AIRCRAFT MODEL POSITIONING JET CHARTER MEMBERSHIPS 8 INTERVIEW: AIR CHARTER SERVICE POPULAR MODELS FOR CHARTER 0 CHARTER DEMAND SUMMER 08 CHARTER REPORT

4 PUBLISHER S NOTE Business aviation is a dynamic industry, made up of various sectors. But, perhaps, the most well-known and long standing of these is charter. Even since the first Lockheed JetStar flew in 97 business jets have been available for hire. But once regarded as a lavish indulgence, chartering a business jet for a flight is now moving mainstream. In the Asia Pacific region, corporate users make up the majority of charterers, but the growing demand from all sorts of users has pushed the industry to diversify. Now, membership schemes and easy booking via mobile apps and online platforms has made charter more complex in its offerings and but importantly more accessible. Often the first exposure to business aviation and its benefits comes from chartering so this sector of the industry plays a vital role. Still, the Asia Pacific has a long way to go before it sees any Uber-like operations a widespread trend visible in the US. As with the whole of business aviation in this region, the charter market faces hurdles infrastructure, operational regulations and airspace limitations, to name a few. This region is also seeing a growing number of Part 9 aircraft owners offering charter, particularly in Hong Kong and China. The continued presence of these private owners offering their aircraft for hire has created tension and competition with legitimate Part charter operators. This remains a critical challenge for the industry as it impedes further investment. Though the challenges seem to be ongoing, the number of business jets in the region saw an increase, as of yearend 07. The total business jet fleet grew almost % from 06, with a total of,8 based in the region. Likewise, those used for charter saw a % growth from the Summer 06, with a total of 0. That s 6% of the total fleet being used for charter. For the second issue of Asian Sky Group s Asia Pacific Business Jet Charter Report, we ll touch on the above topics, plus expand on the information brought to you in our inaugural report the state of the fleet, challenges the market faces and the future of charter. This Summer s report also takes a closer look at the operating regulations of each regional country, showcases the correlation of high-net-worth and ultra-high-net-worth with charter and features data on the most popular charter routes in the region. As always, we, at Asian Sky Group, hope that the information provided within this report is informative and useful. Sincerely, Jeffrey C. Lowe Managing Director, Asian Sky Group SUMMER 08 CHARTER REPORT

5 EXECUTIVE SUMMARY As of June 08, there were business jets in the Asia- Pacific region used for charter; a five percent increase from the 96 business jets used for charter in 06. The business jets represent 6% of the total regional fleet. Mainland China, Australia and India were home to the three largest charter fleets in the region, with 87, 6 and 9 aircraft, respectively. While Mainland China and India are notable for their economic growth and large populations, Australia is notable for having one of the most mature and well-developed business aviation environments in the region. 8 business jets were added to the Asia-Pacific charter market, while 69 were removed from the market. Newly-added charter aircraft included new deliveries () and pre-owned () additions, as well as those that recently changed their mission to charter (7). Fleet deductions consisted of aircraft that were no longer available for charter (7), along with those that were sold or relocated (9) to other countries and aircraft placed into retirement (). Mainland China had the largest fleet expansion between 06 and 08, increasing from 6 to 87 business jets; a 0% increase. This growth illustrates the potential of Mainland China s charter market. The Philippines had the second largest fleet increase, with three business jets added marking a 0% fleet growth. Other regions that saw fleet growth include New Caledonia (), Japan (), Papua New Guinea (), Bangladesh () and New Zealand (). Bombardier led the charter market with 79 aircraft, making up % of the region s charter fleet. Cessna the second most preferred OEM had 6 business jets for charter in the Asia Pacific, occupying 0% of the market. Large aircraft dominated the market with a 0% share (9) and a % growth rate, compared to 06. China and India the two largest markets were dominated by large aircraft, with almost half of each fleet belonging to this size category. Light aircraft occupied the second largest share, with a % share (70). The average age of a business jet used for charter in the region is years. Malaysia has the oldest fleet (), while Bangladesh has the youngest (6). SUMMER 08 CHARTER REPORT

6 MARKET OVERVIEW 609 India 60 % 9 % Bangladesh % Singapore % % % 6% % % South Korea Japan 0% % Mainland China 9 7% 7% Taiwan 9% 6% % 0% Hong Kong Macau 6 6 % % Thailand % 6% Australia 0 % % Indonesia % PNG 00% New Caledonia SUMMER 08 CHARTER REPORT SUMMER 08 CHARTER REPORT

7 MARKET OVERVIEW 0 0 ACTIVE CHARTER FLEET 96 6% 06 0% 8% Philippines 0% % New Zealand 6 6% 08 NOTE: Charter fleet as a percentage of total fleet. 7% 0% Malaysia ASIA PACIFIC BUSINESS JET CHARTER LARGEST MARKET 87 MAINLAND CHINA LARGEST NET FLEET ADDITION + MAINLAND CHINA LARGEST NET FLEET DEDUCTION - AUSTRALIA Fleet Growth for the Major Markets Net Fleet Growth Growth Rate REGION Greater China 6% East Asia 7% South Asia - - Oceania - -% Southeast Asia -6-9% TOTAL % COUNTRY (REGION) Mainland China 0% Philippines 0% New Caledonia - PNG - Japan 8% New Zealand % Bangladesh - Singapore - - Taiwan - - South Korea - - Macau - -% India - -% Indonesia - -% Hong Kong - -% Thailand - -9% Malaysia - -0% Australia - -7% TOTAL % NOTE (): Fleet distribution is based on business jets in service and their active base of operation. SUMMER 08 CHARTER REPORT

8 MARKET OVERVIEW Charter Fleet by OEM Charter Fleet by Size Category Airbus (%) Others 0 (%) Corp. Airliner (%) Boeing 0 (%) Embraer 6 (8%) Hawker 9 (9%) Dassault 6 (%) G Bombardier 79 (%) Gulfstream 7 (9%) Cessna 6 (0%) Very Light 8 (6%) Mid-Size 7 (8%) Long-Range 8 (9%) G Large 9 (0%) Light 70 (%) The Asia-Pacific business jet charter market has witnessed a rise of around % from a total of 96 jets dedicated for charter in 06 to in 08. The two-year term saw an increase of 8, which was offset by a decrease of 69; a final net increase of jets to the charter fleet. Of the additions, two were brand new additions and were delivered into service in either 07 or 08, aircraft were pre-owned additions delivered into the regional market and 7 aircraft were previously based in the region but saw a change in mission to charter. Of the deductions, 7 were due to a change in mission from charter, 9 aircraft were pre-owned deductions and were removed from the region and retired. 08 Charter Fleet Additions and Deductions A further breakdown by size category presents a better picture of the individual popularity of the charter fleet by size category. Of the 7 new deliveries and pre-owned additions, were large-size, followed by long-range and mid-size with six and four, respectively. mid-size aircraft, out of a total of, were sold or retired from the Asia-Pacific market between 06 and 08. Fleet 06 Brand new aircraft for charter Pre-owned aircraft for charter Changed aircraft mission to charter No longer available for charter Sold, relocated or retired Fleet 08 Considering the change of mission, long-range and large-size aircraft experienced an increased popularity within the two-year term and saw a net change in aircraft dedicated for charter mission by 6 and 9, respectively. Overall, the large-size category saw the greatest increase in fleet - by 6 aircraft, whereas the mid-size category saw a net decrease in charter fleet by four. Considering the total fleet in the region, the most popular charter size is the large-size aircraft, with 9, closely followed by light and long-range aircraft, with 70 and 8, respectively. With 80 charter jets in operation throughout the region, Bombardier takes the crown for the most popular OEM. 6 SUMMER 08 CHARTER REPORT

9 MARKET OVERVIEW Charter Fleet by Base Country (Region) and Size Category Mainland China Australia India Singapore Philippines Japan Thailand Malaysia Indonesia Hong Kong Taiwan New Zealand South Korea Macau New Caledonia Bangladesh PNG Corp. Airliner 7 Large 6 9 Light Long-Range Mid-Size Very Light 8 Total Charter Fleet Movements by Size Category Brand New or Pre-owned Aircraft Addition Became Available for Charter Sold, Relocated or Retired No Longer Available for Charter FLEET CHANGE MISSION CHANGE Corp. Airliner + Long-Range + Large +6 Mid-Size - Light - Very Light - SUMMER 08 CHARTER REPORT 7

10 MARKET OVERVIEW Summary Aircraft Models by Base Country (Region) 87 9 MAINLAND CHINA INDIA THAILAND AUSTRALIA 9 G0 G0 Challenger 80 Legacy 60 BBJ Challenger 60 Falcon 7X Hawker 800/XP Challenger 00 G00 CRJ00 Citation Excel Global Express XRS Global 000 Hawker 900XP Falcon 000EX EASy Phenom 00 Learjet 60XR G80 Challenger Falcon 900LX Citation II/SII/Bravo Citation Mustang Citation III/VII Citation /CJ Phenom 00 Challenger 60 Citation Ultra Challenger 600/60 Global Express XRS Citation CJ Learjet Falcon 0F- Falcon 0 Westwind Citation Sovereign Falcon 900C Citation X Learjet 60 Learjet G-IV Citation Encore+ Global 6000 Learjet Global Express Citation I/SP Falcon 000 Legacy 600 Hawker 00A Phenom 00 Hawker 800XPI G0 Hawker 80XP 9 6 Falcon 000/EX EASy Citation CJ/+ Citation Excel/XLS/+ Falcon 000LX Hawker 80XP Premier I/IA Legacy 60 Challenger 60 Hawker 800XP/XPI Challenger 00/0 Citation II Challenger 60 Falcon 900EX EASy ACJ9 CRJ00 Citation Mustang G0 Phenom 00 G00 ERJ-ER Global 000 Hawker 900XP Global 6000 Lineage 000 Global Express Falcon 7X Global Express XRS Hawker 70 MALAYSIA Westwind / G0 Global Express XRS Falcon 7X Challenger 60 Challenger 00 SINGAPORE Learjet 60 G0 G0 Global 6000 Global 000 Challenger 60 Legacy 600 Learjet Learjet G00 Hawker 800/XP Premier I Citation Bravo G-V Citation Mustang Hawker 80XP Citation X Citation CJ Falcon 7X PHILIPPINES JAPAN Learjet Hawker 800/XP Challenger 600 Challenger 00 Learjet 0 Citation XLS+ Westwind G0 G-IV G60 Global 6000 Citation Ultra/V Citation CJ/+ G60 ER ACJ8 Citation Sovereign 9 HONGKONG Global 000 Global 6000 G0 G00 BBJ G0 0 INDONESIA Legacy 600 Hawker 900XP Legacy 60 BBJ G-IV-SP TAIWAN Legacy 600 Hawker 00XP G0 Global 000 NEW ZEALAND SOUTH KOREA Nextant 00XTi Falcon 000LX Citation Mustang Citation Sovereign BBJ Global Express XRS G60 MACAU Falcon 000LX ACJ9 NEW CALEDONIA Citation CJ Citation CJ+ BANGLADESH PNG Falcon 7X Citation CJ 8 SUMMER 08 CHARTER REPORT

11 MARKET OVERVIEW Summary Aircraft Models by Registration 80 MAINLAND CHINA (B-) G0 G0 Challenger 80 7 Legacy 60 6 Challenger 60 6 Falcon 7X Hawker 800XP BBJ Challenger 00 G00 CRJ00 Global Express XRS Phenom 00 Learjet 60XR Hawker 900XP G80 Falcon 000EX EASy Challenger 60 Citation Excel Falcon 900LX 76 AUSTRALIA (VH-) 9 6 Citation II/SII/Bravo Westwind / Citation Mustang Citation /CJ Citation III/VII Learjet 60 Learjet Challenger 60 Phenom 00 Citation Ultra Falcon 0F- Citation Sovereign Learjet Falcon 900C Citation CJ Challenger 600/60 Falcon 0 Global Express XRS G0 G-IV Legacy 600 Citation X Global 6000 Phenom 00 Global Express Citation Encore+ Citation I/SP Falcon 000 Hawker 00A G0 Hawker 800/XPI G0 Hawker 80XP Learjet 9 INDIA (VT-) 9 Falcon 000/EX EASy Citation CJ/+ Citation Excel/XLS/+ Falcon 000LX Hawker 80XP Premier I/IA Legacy 60 Challenger 60 Hawker 800XP/XPI Challenger 00/0 Citation II Challenger 60 Falcon 900EX EASy ACJ9 CRJ00 Citation Mustang G0 Phenom 00 G00 ERJ-ER Global 000 Hawker 900XP Global 6000 Lineage 000 Global Express Falcon 7X Global Express XRS Hawker 70 7 UNITED STATES (N) Global 6000 G60 BBJ G0 G60 ER ACJ8 Westwind Challenger 60 G0 PHILIPPINES (RP-C) Learjet Hawker 800/XP Westwind / Citation XLS+ Challenger 600 Learjet 0 Challenger 00 G0 G-IV THAILAND (HS-) G00 Hawker 800/XP Premier I G-V Citation Mustang Hawker 80XP Citation X Citation Bravo Citation CJ 8 INDONESIA (PK-) 6 JAPAN (JA) Citation V Citation CJ+ Challenger 00 Citation Sovereign TAIWAN (B-) Hawker 900XP Legacy 60 Legacy 600 G-IV-SP 6 HONG KONG (B-H/B-K/B-L) G0 Global Express XRS Global 000 Legacy 600 Hawker 00XP G0 Global 000 NEW ZEALAND (ZK-) Nextant 00XTi Falcon 000LX Citation Mustang Citation Sovereign OTHER REGIONS BERMUDA (VP-B/VQ-B) Global 000 Legacy 600 SOUTH KOREA (HL) BBJ Global Express XRS G60 FRANCE (F-) Citation CJ+ Hawker 800XP Citation CJ GUERNSEY (-) G00 BBJ MALTA (9H-) Global 6000 Challenger 60 CAYMAN ISLANDS (VP-C) Global 000 DENMARK (OY-) Falcon 7X LUXEMBOURG (LX-) Global 000 ACJ9 SAN MARINO (T7-) Global 000 UNITED ARAB EMIRATES (A6-) Legacy 600 PAPUA NEW GUINEA (P-) Citation CJ MALAYSIA (9M-) Challenger 00/0 ISLE OF MAN (M-) Falcon 7X MACAU (B-M) Falcon 000LX SUMMER 08 CHARTER REPORT 9

12 MARKET OVERVIEW Asia Pacific Top Charter Operators by Model 9 Deer Jet G0 (8) HAWKER 800/XP/XPI () BBJ () G0 () Falcon 7X () 8 Club One Air Falcon 000 () Citation II () Citation Excel () CRJ 00 () 7 Australian Corporate Jet Centres Challenger 600 () Citation Ultra () Hawker 80XP () Citation Sovereign () Global Express () Challenger 60 () Citation I/SP () 7 Citation Mustang () Flight Options Citation III/ VI/VII () Citation Ultra () 7 Reliance Commercial Dealers Ltd. Falcon 900EX EASy () Global Express () ERJ-ER () Global Express XRS () ACJ9 () Global 6000 () 6 Revesco Aviation Phenom 00 () Challenger 600/60 () Phenom 00 () Citation Bravo () 6 Asian Aerospace Learjet () G-IV () G0 () Executive Westwind / (6) 6 Jet Asia BAA Global Jet International G0 () Global Express XRS () Legacy 60 () Challenger 60 () Challenger 60 () Hawker 00A () Falcon 7X () Citation VII () Challenger 80 () CRJ00 () Jiangsu Jet MJets G00 () Citation CJ () G-V () Citation Bravo () Citation X () Top Charter Models of Each Size Category CORP. AIRLINER LONG- RANGE LARGE 9 BBJ 7 8 G0 ACJ9 Legacy Challenger 80 Lineage G0 Falcon 7X Global 000 Global 6000 Falcon 000/ EX EASy ACJ8 6 Global Express XRS Challenger 60 Pacific Flight G0 () Services Phenix Jet TAG Aviation G60/ER () Global 000 () Learjet () Learjet () G0 () G0 () Global 6000 () Global Express XRS () MID-SIZE LIGHT VERY LIGHT Hawker 800/XP/XPI Citation II/ SII/Bravo 8 Citation Mustang 8 Challenger 00/0 0 Citation CJ/+ Citation /CJ 7 G00 9 Westwind / Hawker 900XP 7 Citation Excel/ XLS/+ Phenom 00 Premier I/IA Hawker 80XP Citation Ultra/V 0 SUMMER 08 CHARTER REPORT

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14 FACTORS IMPACTING FACTORS IMPACTING CHARTER BY AIR CHARTER SERVICE Over the course of the years, the business jet charter market has been met with increasing demand. Efficient and on-demand travel is a growing trend in the region and the emergence of membership schemes and bespoke charter packages has made the market easier and more accessible. Still, operators and brokers, alike, are faced with challenges of limited infrastructure and regulations; yet the market continues to be on the rise. CURRENT MARKET The market is buoyant and year on year we are seeing a greater demand for private jet charter. Last year there was an increase in Air Charter Service s flight numbers by % and this year the figures are suggesting a continued upward trend. The general feel of the market is a positive one. As brokers, Air Charter Service, ideally needs more aircraft in the region that are Part and freely available for charter. There currently seems to be a pattern of aircraft leaving the region, being sold off or companies consolidating, which may suggest otherwise. There is no doubt, though, that the demand for charter is growing. We just need the infrastructure in the region to catch up. Hopefully, with this increase in competition the pricing will start to become more in line with Europe or the US where it is more affordable. Last year there was an increase in Air Charter Service s flight numbers by %. TIMING Throughout the year there are spikes in utilization of charter, however the pattern is less apparent than in other parts of the world. This could be down to the more moderate climate here in Asia so a little less obvious then other parts of the world plus a large percentage of trips are for business purposes. Periods around major events, such as Art Basel in Hong Kong or the Singapore Grand Prix see increased activity in the region, plus SUMMER 08 CHARTER REPORT

15 FACTORS IMPACTING the many summits and regional ASEAN meetings. The festive season is always busy around Christmas and Chinese New Year and other public holidays. With it also being the European winter, we do see other ACS offices enquiring more for trips in the Asia- Pacific region. Similarly, as the European summer approaches we do find lots of clients travelling to Europe for their holidays, typically France or Italy. DESTINATIONS Macau is now back on the map with its diversification away from purely gambling. The SAR s anti-corruption policy has, to a degree, re-corrected the market. Manila is another high-roller hotspot, with multiple casinos attracting players. The Fortune 00 companies and other multinational companies make up a large percentage of private jet charter within Asia travelling to major hubs conducting business. Private Jet charter for business really comes into its own when there is a tight schedule and multiple cities have to be visited in a short space of time. Singapore is becoming a good springboard with an increasing number of our European and American clients flying in on commercial and connecting with private jets, especially when travelling to the remoter parts of Indonesia. The private jet charter market in Asia is still in its infancy with plenty of room for growth. The countries where generally there are no aircraft available for charter, such as Myanmar, Cambodia, Laos and Vietnam, are all very private jet friendly. Myanmar takes a bit longer to get permits and permissions, however, the others can be obtained quickly and often in a matter of hours. OPERATIONAL RESTRICTIONS Where does one start with the restrictions in Asia? Infrastructure, airspace limitations and endless regulations are among the challenges faced in this region. This is where an operator or broker can really add value and a reason why, in its current state, pricing apps and newer technology are of no major threat. Experience counts for everything in Asia and there are seemingly no simple trips. FUTURE OF CHARTER The future is bright for private jet charter; you only have to look at the number of millionaires and billionaires in China alone. The private jet charter market in Asia is still in its infancy with plenty of room for growth. Hopefully, with the easing of restrictions, red tape and improved infrastructure we can see private jet movement becoming less challenging and more affordable. SUMMER 08 CHARTER REPORT

16 REGULATIONS Regulations and restrictions can have significant impacts on the efficiency and effectiveness of aircraft operations in the Asia Pacific. The following presents an overview of challenges related to business aircraft operations throughout the region. While flexibility and privacy are two major reasons clients choose to charter a business jet, varying regulations can significantly lower such flexibility and increase costs. Restrictions are often placed on airport ramp parking, landing and take-off permits, overflight permits and cabotage for commercial (charter) flights. Often long delays in obtaining required flight permits in Southeast Asian countries cannot be avoided. Overall, the time for obtaining permits can vary depending on how well connected an operator s flight operation department and incountry ground handler are. Additionally, many countries require a sponsor letter from a locally-based sponsor, in order to approve required flight permits. Normally, domestic- and foreign-registered aircraft are treated differently, with the latter facing more operating restrictions. Foreign-registered aircraft parking restrictions are usually related to the airport s hangar availability, as well as usage of the airport, whether commercial or general. Airports that are merely for commercial-use do not, typically, accommodate business jets for overnight parking, for instance, Soekarno-Hatta International airport in Jakarta and Suvarnabhumi airport in Bangkok. of operating a charter flight in the country. The lead time for Southeast Asian countries generally ranges from one to three business working days. Indonesia, which is infamous for its highlyregulated business aviation market, has the longest lead time in Southeast Asia with a minimum of five business working days to process permits. Countries like India can take up to seven days in some cases. Cabotage the restriction imposed on foreign-registered aircraft to commercially carry passengers to and from locations within the same country can significantly lower operational flexibility for business jet charter operators. Most countries with Mainland China being one of the main exceptions do not allow commercial cabotage, however, China's operating rules for aircraft with less than 0 seats unofficially allow for such practices, with a limit of six flight legs including entry and exit, once the proper flight clearance and sponsor letters have been processed. Cabotage-like restrictions exist in other countries around the region, as well. For example, Thailand s cabotage rule applies to private flights, Taiwan accommodates flights in and out with the same passengers, and several other countries restrict picking up a local passenger and flying them out of the country. Lead time of permit applications affects the flexibility of a charter operation. The longer the lead time, the lower the flexibility SUMMER 08 CHARTER REPORT

17 REGULATIONS AUSTRALIA Compared to other countries in the Asia Pacific, Australia has unique charter permit requirements: a formal Charter Permission in Australia is required, instead of a landing permit. Permit application lead time is five business working days and an operator can only conduct eight non-scheduled flights in a -month period. There is a cabotage rule in Australia, however, there are often exemptions, if requests are made to the country s civil aviation authority. Still, some airports have curfew hours limiting the operations. HONG KONG Hong Kong faces tight hangar and ramp parking availability, leaving lead times to range from a minimum of hours up to 0 days prior to the estimated time of arrival. Apart from the standard landing permit, a sponsor letter is required for charter flights into the city. In addition, due to environmental noise issues surrounding the residential area near the Hong Kong International Airport, airport departure and arrival slots are partially restricted for business jets from 0pm to 7am the next day. MAINLAND CHINA Applying for a charter flight permit in Mainland China requires a lead time of three to seven working days and a sponsor letter. The cabotage rule in China is not strictly imposed, with charter flights being allowed to travel up to five locations in China. For charter flights travelling to domestic-only airports, two sponsor letters are required. Parking restrictions are imposed on a few airports. For instance, the Beijing Capital Airport limits the maximum group time to hours only. MALAYSIA Malaysia has relatively relaxed regulations towards the business aviation industry, with no sponsor letter requirement for charter flights flying into the country. Despite its less restricted nature, a cabotage rule still applies to charter flights operating in Malaysia. Lead time for permit application is three business working days and business jets are allowed to land at most of the country s domestic airports. INDIA Aircraft parking is generaly available at most airports in India, however, there are different parking restrictions, such as 7- hour limited parking at Mumbai airport. Lead time for permit applications in India varies from three days for most of the charter flights to seven days, when a charter flight arrives from a Prior Preference Country (PRC), such as China and Pakistan. The cabotage rule is implemented in India. Sponsor letter is not a requirement for permit application, yet it is recommended. PHILIPPINES The Philippines Ninoy Aquino International Airport in Manila faces a critical slot shortage, as such business aviation aircraft are accommodated only minimally. Both landing permits and a sponsor letter are required for charter flight and the cabotage rule is applied on charter operations. Since most airports in the country are domestic-only, extra attention and checking are needed before starting charter operations in this island country. INDONESIA Except Soekarno-Hatta International Airport in Jakarta, which does not provide overnight parking, other major international airports in Indonesia typically have no parking issues. A sponsor letter is required for charter flight entering Indonesia, with a lead time of five to seven business days. Domestic charter flights are under more restrictive measures, while a positioning flight is allowed to pick up passengers and fly out internationally. With a highlyregulated business aviation nature, charter flights in Indonesia face route/airport limitation and a strict cabotage rule. JAPAN Some airports in Japan have limitations on the length of parking time, which ranges from 0 days to 0 days. Additionally, some airports have prohibited parking during winter. Lead time for permit application varies from 90 minutes to days, depending on the arrival airport, scale and purpose of the charter trip. There is no cabotage rule in japan, but no additional passengers can be boarded for domestic flight legs. Moreover, there is a strict curfew restriction at New Chitose Airport in Hokkaido for India, Greater China and Russia registered flights, for security purposes. SINGAPORE While Changi International Airport is restrictive toward business jets, permitting a maximum ground time of 8 hours, Seletar Airport is more accommodating with dedicated business jet operations. A sponsor letter is not mandatory but the cabotage rule is applicable to the charter operations. Lead time ranges from three business days for the air operation permit application to one working day for the air transport permit application. THAILAND Many of the islands and cities in Thailand do not allow overnight parking, while the remaining have maximum ground time limits, ranging from three to 8 hours. A sponsor letter is not required but there is a cabotage rule and route/airport limitation. Permit application lead time is three business working days. SUMMER 08 CHARTER REPORT

18 AIRCRAFT MODEL POSITIONING Asia-Pacific Region Estimated Hourly Charter Rate vs. Cabin Size,000,00,000,00,000,00,000 Corp. Airliner Long-Range Large Mid-Size Light Very Light BBJ ACJ8,00,000 0,00 0,000 G0 FALCON 7X GLOBAL EXPRESS XRS G60 ESTIMATED AVERAGE HOURLY PRICE (USD/HR) 9,00 9,000 8,00 8,000 7,00 7,000 6,00 6,000,00 CITATION SOVEREIGN CITATION X G80 CHALLENGER 00 / 0 G00 FALCON 900LX CHALLENGER 60 LEGACY 600 FALCON 000EX GLOBAL 000 G-V G0 LEGACY 60 CHALLENGER 80 G-IV / IV-SP,000,00,000,00,000 CITATION CJ CITATION CJ / + CITATION MUSTANG HAWKER 00XP CHALLENGER 60 LEARJET 60 / XR HAWKER 900XP FALCON 000LX LEARJET 0 / PHENOM 00 HAWKER 800 / XP / XPI LEARJET CITATION EXCEL / XLS / + CITATION ULTRA / V,00,000 PHENOM 00 PREMIER I / IA HAWKER 70,00, ,00,600,00,00,000,800,600 6,00 8,000 CABIN SIZE (ft ) NOTE: Logarithmic scales are applied to aircraft cabin size and max range. The estimated aircraft charter rate is based on the average hourly rate of the charter fleet in Asia Pacific, actual aircraft hourly rate may be different based on aircraft s condition. The estimated hourly rate does not include airport charges, handling fee, tax or other service fees. 6 SUMMER 08 CHARTER REPORT

19 AIRCRAFT MODEL POSITIONING Asia-Pacific Region Estimated Hourly Charter Rate vs. Max Range,000,00 BBJ,000 Corp. Airliner Long-Range ACJ8,00 Large,000 Mid-Size,00 Light Very Light,000,00,000 0,00 0,000 GLOBAL EXPRESS XRS FALCON 7X G0 G60 9,00 9,000 GLOBAL 000 8,00 8,000 7,00 7,000 6,00 6,000,00 CHALLENGER 80 CHALLENGER 00 / 0 CITATION SOVEREIGN CITATION X G0 CHALLENGER 60 LEGACY 60 G80 LEGACY 600 G00 FALCON 000EX FALCON 900LX G-V,000 HAWKER 00XP CHALLENGER 60,00,000,00,000,00,000 PREMIER I / IA LEARJET 60 / XR LEARJET 0 / CITATION CJ PHENOM 00 LEARJET CITATION CJ/+ CITATION EXCEL / XLS / + CITATION ULTRA / V CITATION MUSTANG PHENOM 00 HAWKER 900XP HAWKER 800 / XP / XPI HAWKER 70 FALCON 000LX,00, ,000,00,000,00,000,00,000,000 6,000 7,000 8,000 ESTIMATED AVERAGE HOURLY PRICE (USD/HR) MAX RANGE (N.M.) NOTE: Logarithmic scales are applied to aircraft cabin size and max range. The estimated aircraft charter rate is based on the average hourly rate of the charter fleet in Asia Pacific, actual aircraft hourly rate may be different based on aircraft s condition. The estimated hourly rate does not include airport charges, handling fee, tax or other service fees. SUMMER 08 CHARTER REPORT 7

20 COMMITMENT TO CUSTOMER SERVICE INTERVIEW WITH AIR CHARTER SERVICE Interview by Litalia Yoakum Customer service and exceeding expectations have been at the core of Air Charter Service s foundation, since the company s inception in 990. Crossing oceans and opening in new markets, the company continues to reach new heights, all while maintaining its original values. In 008, the UK-based brokerage firm expanded its presence into the Asia Pacific with an office in Hong Kong. 0 years later, Air Charter Service now has regional offices in Sydney and Beijing, with plans to expand its China operations scheduled for this year. WHAT IS THE HISTORY BEHIND AIR CHARTER SERVICE? Air Charter Service (ACS) was formed in 990 by Chairman Chris Leach and CEO Justin Bowman in a basement. At that time in the UK, aircraft charter marketing was saturated but Chris believed that there was space for another aircraft charter company that focused solely on exceptional service and building long-lasting relationships with its customers. He believed that if you went that extra mile for them then they would always come back and with that blueprint he would build a business, thus ACS was born. Decades later, with a network of offices spanning North America, South America, Europe, Africa, CIS, Middle East, Australia and Asia, ACS has grown as a proud supplier to thousands of clients worldwide. We are now a global company with worldwide offices, spanning all six major continents and we offer private jet, commercial airliner and cargo aircraft charters, as well as onboard courier solutions. Globally, we arrange almost,000 contracts annually with revenue of close to 700 million dollars, and we now employ more than 0 staff worldwide. Focusing on the APAC region, we have had our presence in Hong Kong since 008 and at that time we only consisted of a cargo charter division and a private charter division. Our Beijing and Sydney offices opened in 0 and 06, respectively, to cope with the growing charter demand of these markets. For now, all three offices, with the combined workforce of more than 0 charter experts, serve passenger and cargo charter (as well as onboard courier) requests. WHAT IS THE PROCESS OF BOOKING A CHARTER WITH ACS? Booking private travel is quick and easy with us. There are five steps from the enquiry stage to the flight taking place:. The Enquiry: Whether you reach us by a call, an or an online enquiry form from our website, clients will be assigned a personal account manager, who is available /7, to handle all enquiries. The first thing he/she will need to know is the preferred start and end date and destinations. This is not necessarily the exact airport, but the actual destinations, as the personal account manager may know an airport or 8 SUMMER 08 CHARTER REPORT

21 AIR CHARTER SERVICE landing spot better suited to each client s requirements. Secondly, we will need to know who is travelling and why. We will take this into account when choosing your aircraft and airports. At this point, we will also discuss any other key requirements for the trip. For example, we can ensure multimedia options are sufficient, or that we offer aircraft that allow pets to be by their owner s side in the cabin.. The Options: As soon as we have all the required information above, we will identify which types of aircraft are best-suited to the route and schedule and contact the relevant operators for availability. Rest assured the personal account manager won t bombard clients with hundreds of identical aircrafts to choose from, he/she only provides the most suitable flight options, matching your exact requirements.. The Booking: When everyone is ready to go ahead we will reconfirm the chosen aircraft availability and send a booking request form to complete. Once returned to us, we will secure the aircraft and the operational planning process will begin. A charter itinerary will then be received, with all the key details needed for the journey, including departure terminal information, flight times and contact numbers for the crew. Where required, passenger passport details will be requested before the flight which will be submitted to the relevant customs authorities.. The Finer Details: This is also the stage where clients can take advantage of the bespoke extra touches, like gourmet meals sourced from a favourite restaurant, preferred wines or whisky, or even customize parts of the aircraft interior if the client is flying as part of a special occasion.. The Flight: We can be on hand every step of the way, at the terminal and on board if necessary to ensure that the flight goes as smoothly as possible. WHAT CHARTER PRODUCTS ARE OFFERED TO ACS CLIENTS AND WHAT ARE THE BENEFITS? We have our private jet card, Empyrean Card, offering cardholders the ability to fly to and from anywhere in the world that is accessible by private air charter. Dependent upon the chosen account option, funds deposited are held in a separate, third-party bank account, providing assurance that the investment is 00% safe at all times. To complement the private aircraft charter, we also have our very own dedicated Travel & Concierge service. Our dedicated Concierge provides a range of specially curated lifestyle services from private art gallery viewings and VIP opera tickets, to yacht charters and ski chalets. With personalized service throughout, we ll work around the clock to ensure your trip runs smoothly, leaving you to get on with enjoying it all. HOW DOES ACS SET ITSELF APART FROM THE GROWING NUMBER OF CHARTER BROKERS? We invest heavily in training our charter experts. Our brokers are specialists in all aspects of air chartering. All of our expert account managers undergo extensive training and have first-hand experience managing charters from start to finish, ensuring they deliver only the highest levels of service. We can be on hand every step of the way, at the terminal and on board if necessary At ACS, we take pride in our stringent company procedures, employing a dedicated safety and compliance department. We are proud to say that we are a Wyvern Authorized Broker, part of the sister Pilot & Aircraft Safety Survey program for several years, as well as being a member of several international air charter associations globally, ensuring that safety is always at the forefront of our mind. WHAT ARE THE PLANS OF ACS FOR CHINA? We moved to larger premises in Beijing in May 08 to enable the next step in our plans for expansion. Ten years ago, it was still a novelty for people to use a business jet, but today it's really starting to become a part of everyday life for hundreds of people. It's also much easier to operate an aircraft in China today than it was 0 years ago due, in part, to the gradual liberalization of airspace. With more than one million millionaires in China and the government s plans to increase the number of airports from 0 to 60 by the end of 00, all these pointed to a favorable private jet market environment. Meanwhile, our cargo operation has also gone from strength to strength we doubled the size of our cargo team and saw tripledigit growth in charter numbers last year. We have ambitious expansion plans in China and in this new office we now have the space to triple the team size in the coming years. WHAT DOES THE FUTURE HOLD FOR ACS THROUGHOUT THE ASIA-PACIFIC REGION? With our stronger and stronger broker teams for all the divisions, as well seeing the APAC market gaining the knowledge of aircraft chartering and understanding of the needs of chartering, ACS will continue to expand our network of offices to more cities and countries in the region in the near future. SUMMER 08 CHARTER REPORT 9

22 CHARTER DEMAND Asia Pacific has continued to be an important driver of the world s economic development, accounting for over one third of the global growth in 07, according to the World Bank. At the same time, the airline industry has also reported continued growth in the region. Traffic data from the Association of Asia Pacific Airlines reflects a 9.% y-o-y increase in the region s international passengers carried by airlines in April 08, with a total of 9.8 million international travelers. The increase in demand for private air travel is also expected to expand. Business jet charter has long been a preferred mode of transportation for business travelers hoping to travel quickly and efficiently, in a private and secure environment. Popularity has gradually expanded to include high-end leisure tourists. Today, charter users can be categorized into three types: corporate, private and government. In the Asia Pacific, the primary need for business jet charter continues to be for corporate use. on a scheduled flight, they often travel as first class or business class passengers. It is likely that an UHNW either already owns a business jet or is connected to someone who owns a business jet. The third type of jet charter user is the government. Government officials often use business jet charter for domestic travel and international diplomatic visits. On some occasions, royal families may use charter services that are operated by a trusted domestic charter operator. These users value security and privacy above all else, and, additionally, benefit from the efficient travel provided by a non-scheduled charter flight. Views: Future Business Jet Usage Neutral Within the region, a migration of production facilities and factories popped up in countries around the region, including Vietnam, Cambodia, Myanmar, the Philippines, Bangladesh and Indonesia, as traditional manufacturing costs in China became less economical. Infrastructure in these new manufacturing hubs was, and continues to be, scarce and unrefined; a minor inconvenience factory owners and corporations have come to accept in exchange for lower manufacturing costs. Thus, the benefit of globalization and the emergence of the Asia-Pacific consumer market encouraged firms to expand their intra-pacific business, creating air travel demand. Slightly Pessimistic Very Pessimistic Slightly Optimistic Very Optimistic Faced with various travel difficulties, such as lack of infrastructure and few scheduled flights, business jet charter has presented itself as a means for corporates to reach various locations in a short amount of time, avoiding delays and other costs often associated with commercial travel. Sports teams, event organizers, and movie production groups are also among the users in the corporate category. These clients often value security and convenience, avoiding hassle in busy terminals and less interaction from overenthusiastic fans. Asian Sky Group recently conducted a survey among operators in the Asia-Pacific region in December 07. The operators were asked their sentiments regarding the future of business jet usage in the region. More than half of the respondents replied positively, with 8% having an optimistic view. % of the respondents had a neutral opinion and said that they needed more time to analyze the market, whereas, only 6% had a pessimistic view. The second type of charter passenger is the private user. Private users include Ultra-High-Net-Worth-Individuals (UHNWIs), celebrities traveling for private purposes, and VVIP. This group values privacy, as well as security. UHNW customers are wealthy individuals with a net worth of US$0 million or above. When flying With an increasing pool of customers who are willing and capable to opt for charter services, in addition to the optimistic views of the operators regarding the future of business jet usage; charter demand seems to have a very promising future in the Asia-Pacific region. 0 SUMMER 08 CHARTER REPORT

23 ASIA PACIFIC UHNWI POPULATION ANALYSIS Many private air travel industry experts have kept a close eye on the rapid growth of the HNWI and UHNWI populations; understanding that there is a direct correlation between HNWI and UHNWI growth and business jet charter demand. Over the past four years, the Asia-Pacific region has seen a dramatic increase in the population of individuals possessing a worth of more than US$0 million in assets. As of 07, there were around 7,000 individuals who belonged to this category. This number has grown by almost,000 within the past four years, representing an average annual growth of 6%. UHNWI Population (+0M) Australia,60 Mainland China Hong Kong,0 India,90 Indonesia,60 8,800 The Asia-Pacific region has also witnessed a rise in the number of individuals worth over US$0 million in assets. By 07, there were a total of,90 individuals belonging to this category. Taking solely the Asia Pacific into consideration the operating challenges, strict cabotage rules and restrictions on charter operators in certain countries pose some limitations on the growth of the charter market. Regardless, there have been strong signals indicating the growth of the charter industry, with more HNWI and UHNWI opting for private jet charter services. A key reason for the growing demand is the need for these individuals to save time and reduce the hassles of commercial air transport. With the means and the desire to do so, HNWI and UHNWI are propelling the demand of the charter industry to newer heights. Japan Malaysia New Zealand Philippines Singapore South Korea Taiwan Thailand ,00,60, ,960 UHNWI Population Growth (0M+) UHNWI Population Growth (0M+) by Region 9,99 0%,0.% 7,00 8.%, ,7,0,60,868,67,70,0 0, 9,7,90,700,77 8, 6,870,90, East Asia Greater China Oceania South East Asia SOURCE: Knight Report and WealthX SUMMER 08 CHARTER REPORT

24 POPULAR CHARTER FLIGHT ROUTES Beijing Seoul Tokyo 6 Shanghai Macau Hong Kong Sanya 9 Bangkok 8 Manila 0 Saipan Phuket Malé Subang 7 Singapore Sorong Bali Top 0 popular charter routes in Asia Pacific Other popular charter routes in Asia Pacific NOTE: The popular charter flight routes in the above map include locations in the Asia-Pacific region only, excluding Australia, India and New Zealand. The Popular Charter Airport table considers popular departure and arrival airports separately. The data in this table includes locations in the Asia-Pacific region only, excluding India. Popular Charter Airport Location Departure - Airport IATA Location Arrival - Airport IATA Mainland China Hong Kong Singapore Macau Maldives Mainland China Malaysia Philippines Australia Mainland China Beijing Capital International Hong Kong International Singapore Seletar Macau International Malé (Ibrahim Nasir)/Velana International Shenzhen Bao an International Kuala Lumpur/Sultan Abdul Aziz Shah/Subang Manila Ninoy Aquino International Sydney Kingsford Smith Hohhot Baita International PEK HKG XSP MFM MLE SZX SZB MNL SYD HET INCREASING POPULARITY Mainland China Hong Kong Singapore Thailand Mainland China Malaysia Australia Macau Philippines Maldives Beijing Capital International Hong Kong International Singapore Seletar Don Mueang International Shenzhen Bao an International Kuala Lumpur/Sultan Abdul Aziz Shah/Subang Sydney Kingsford Smith Macau International Manila Ninoy Aquino International Malé (Ibrahim Nasir)/Velana International PEK HKG XSP DMK SZX SZB SYD MFM MNL MLE SUMMER 08 CHARTER REPORT

25 POPULAR CHARTER FLIGHT ROUTES Top 0 Popular Charter Routes (Popularity from Highest to Lowest) ROUTES PRICE RANGE Indicative Price in USD DURATION/DISTANCE POPULAR MODELS : Highest : Lowest BEIJING SHANGHAI 8K - 8K hr mins 68nm : Challenger 60 : Global Series : Gulfstream G0 MACAU MANILA 8K - 7K hr mins 6nm : Global Series : Challenger 80 : Gulfstream G0 SINGAPORE HONG KONG 8K - 77K hrs 7mins,9nm : Falcon 000LX : Challenger 60 : Gulfstream G0 HONG KONG BEIJING K - 60K hrs mins,nm : Gulfstream G0 : Challenger 00 : Challenger 60 SUBANG MACAU 0K - 68K hrs mins,6nm : Challenger 60 : Global Series : Challenger 80 6 HONG KONG TOKYO 6K - 76K hrs 8mins,766nm : Global Series : Challenger 80 : Challenger 60 7 SUBANG SINGAPORE 6K - 8K mins nm : Gulfstream G0 : Gulfstream G0 : Challenger 00 8 BANGKOK PHUKET K - 0K hr mins 0nm : Hawker 80XP : Citation Jet /Bravo : Gulfstream G00 9 HONG KONG MALÉ 8K - 9K hrs 7mins,7nm : Challenger 60 : Falcon 000 : Global Series 0 HONG KONG SAIPAN 7K - 8K hrs 0mins,9nm : Challenger 60 : Global Series : Gulfstream G0 NOTE: Duration of flight is calculated with the following assumptions: June wind, 0.8 Mach speed, and 00 lbs payload. The Asia-Pacific region is dominated by charter flights having a flight duration of less than five hours. Charter operators in the region believe that passengers who plan on flying out of the Asia Pacific, and have a flight time of over seven hours, usually opt for flying commercial first class and then utilizing local charter services at the destinations. This growing trend among the customers results in increasing popularity and demand for short range charter flights in the Asia-Pacific region. Unsurprisingly, nine out of the top ten busiest charter routes are short range flights, with an average flight time of hours minutes. The busiest charter route in the Asia Pacific is from Beijing to Shanghai (PEK-PVG) followed by Macau to Manila (MFM-MNL). Charter package prices range depending on the availability, the aircraft model used, the nautical miles separating the destinations and the airport specific operating costs. The popularity of the airports may vary from season to season, with certain airports seeing an increase in activity due to tourism spikes in certain seasons. Overall, Beijing Capital Airport (PEK) ranks as the most popular charter airport. SUMMER 08 CHARTER REPORT

26 EXPLORING CHARTER SERVICE INTERVIEW WITH MR. WANG JIANNING; FUNIAN AVIATION GENERAL MANAGER Interview by Iris Zhou Shenzhen Funian Business Aviation Co., Ltd. (Funian Aviation), subsidiary of Fantasia Culture Tourism Management Co., Ltd, began servicing the business aviation industry in 06. In mid-08, the company picked up its Part certification and is now offering charter to the growing market in Mainland China. After recently acquiring its second Gulfstream G0, Funian Aviation is ready to provide customer-focused service through its exclusive travel itineraries and cost-effective membership packages. WHEN DID FUNIAN AVIATION BEGIN ITS CHARTER PROGRAM? We have been officially qualified for CCAR- operation since May 6th, 08, which makes Funian Aviation eligible to offer charter service. Our current fleet for charter consists of two self-owned G0s. As one of the high-end business jet models, the G0 has been well received because of its comfort and safety in the charter market. With the addition of the G0s, we have devoted ourselves to providing more alternatives for clients in areas throughout South China, as well as in Hong Kong and Macau. WHAT MEMBERSHIP SCHEMES DOES FUNIAN AVIATION OFFER? As a provider of business and leisure trip solutions, we aim to bring professional charter service to HNWIs. Through our mother company, Fantasia Culture Tourism Management Co. Ltd., Funian Aviation is able to offer unique advantages in charter travel providing exclusive and attractive travel itineraries. We have also introduced a more resilient program the Hour Card, which will be a more cost-effective option for clients who travel extensively. Options will include a 0-hour or 00-hour package. SUMMER 08 CHARTER REPORT

27 WHERE AND WHEN DO FUNIAN AVIATION S CLIENTS TRAVEL? The hot spots long-loved by our clients and most Mainland China charterers include the metropolitan cites of Mainland China, such as Beijing, Shanghai, Guangzhou, Shenzhen, and Chengdu. Along with holiday destinations, like Sanya, Haikou, Hong Kong, Singapore, Japan, South Korea, Thailand, Bali, Saipan and other leisure spots throughout the region. Each year, the prime time of charter service falls during summer and winter, to be more specific, spanning from July to October and December to February. Capitalizing on the traveling resources we already have, we are proactively seeking out new travel routes and customizing our charter service to suit our client s needs. WHAT ARE SOME OF THE CHALLENGES OF DOMESTIC CHARTER OPERATORS? The challenge, in Mainland China, comes from the shortage of landing and parking slots and airports for business aviation. The fact that there is a lack of slots at most airports in Mainland China leads to difficulty in applying for slots, according to our clients request. Limited parking during the day and overnight, often means transferring the business jet to another airport. Thus, there are higher operating costs, resulting in the rise of charter rate in the end. WHAT IS THE PROCESS OF BOOKING A CHARTER TRIP WITH FUNIAN AVIATION?. Initial enquiry After getting the initial contact via or phone call from the client, a contact person will help the client determine cost, depending on the flight destination and aircraft used;. Contract signing We will enter into a contract with the client when he or she has confirmed the travel, followed by the payment for the charter service.. Arrangement Once a contract is signed and the aircraft is decided, we will focus on special client needs and try to take care of anything as much as we can from the catering onboard and dietary needs to the transportation upon arrival. We are now committed to establishing ourselves as a brand, providing expert and customeroriented charter service.. Pre-departure Prior to departing, we will assist the client, who just needs to reach the VIP lounge 0 minutes before take-off, with a swift and efficient departure.. Arrival Upon arrival, clients can expect to be picked up, if needed. We will check in after landing to make sure the flight is smooth and all needs are catered to. This aspect of the process is crucial to us, as understanding the needs and feedback of clients helps us to evolve and provide an even better charter experience on the next journey. WHAT DOES FUNIAN AVIATION EXPECT FOR THE FUTURE OF CHARTER SERVICE IN CHINA? The growing prevalence and increasing number of clients have marked a new stage that aircraft charter service in China has stepped into, and meanwhile the client s expectations are maturing, showing their presence in a more pragmatic and rational way. This segment of the market, after a few years in development, has been relatively transparent in terms of price of the service. Given that clients, especially the new ones, are becoming more sensitive to the price, charter operators are required to offer more quality service to meet higher demands from a variety of clients. Based in Shenzhen, Funian Aviation, along with the expansion of charter service in China, will catch up with the market trends while focusing on exploring business opportunities throughout South China, as well as Hong Kong and Macau. We are now committed to establishing ourselves as a brand, providing expert and customeroriented charter service. SUMMER 08 CHARTER REPORT

28 6+7+G 87 MAINLAND CHINA Mainland China is the biggest market for business jet charter in Asia Pacific, with 87, of its total 9, aircraft in service. The market scale has experienced over 0% growth in the past two years, overtaking India as the market leader. In terms of OEM, the majority of the charter fleet in Mainland China are Gulfstream (0, %) and Bombardier (7, %) aircraft. Gulfstream s G0, G0 and the Bombardier Challenger 80 are the most Charter Fleet by OEM Charter Fleet by Size Category Hawker 6 (7%) Boeing 7 (8%) Dassault 8 (9%) Embraer 8 (9%) Bombardier 7 (%) G 87 Cessna (%) Gulfstream 0 (%) Mid-Size (7%) Long-Range (%) G Corp. Airliner 7 (8%) Light (%) 87 Large (8%) Top Charter Operators by Model 9 Deer Jet G0 (8) Hawker 800XP () BBJ () Falcon 7X () G0 () BAA G0 () Challenger 60 () Legacy 60 () Falcon 7X () Jiangsu Jet Lily Jet China Eastern Nanshan Jet Sino Jet Apex Air Mayboune Jet Donghai Jet Challenger 80 () CRJ00 () Global Express XRS () Challenger 80 () Legacy 60 () G0 () G0 () G0 () Legacy 60 () G0 () Challenger 80 () G00 () Falcon 7X () Challenger 00 () Challenger 60 () Challenger 60 () Challenger 60 () Other Charter Operators Reignwood Global Jet Concept Star Jet Astro Air Hanhua Jet Beijing City Int l Jet Sparkle Roll Jet Funian Aviation FreeSky Aviation Allpoints Jet Shenzhen United Jet Wanfeng Aviation China Zhongfei GA Hanergy Holding Group Beijing Airlines DeHong South Asian GA Amber Aviation Hongkong Jet TAG Aviation NetJets Ordors GA Good Jet TOTAL 6 SUMMER 08 CHARTER REPORT

29 MAINLAND CHINA Age Distribution by Model CORP. AIRLINER 6 BBJ LONG-RANGE G0 6 Falcon 7X Global Express XRS Global 000 LARGE G0 Challenger 80 7 Legacy 60 6 Challenger 60 CRJ00 Falcon 900LX Falcon 000EX EASy Challenger 60 MID-SIZE Hawker 800XP Challenger 00 G00 Hawker 900XP Learjet 60XR G80 LIGHT Phenom 00 Citation Excel Year of Manufacture popular aircraft models used for charter service. Additionally, Boeing has six BBJs and one Boeing 787 served for charter; Dassault Falcon has six Falcon 7Xs available for charter. Over 70% of the charter fleet are large and long-range aircraft, reflecting the preference of charter users in Mainland China. of the total business jet charter fleet. Still, most charter operators only operate one to two aircraft. The majority of the charter fleet entered service within the past 0 years, while the average age of the charter fleet is nine years. Deer Jet, with 9 aircraft available for charter, ranks as the top charter operator on the market. BAA operates six charter aircraft, while new charter operator Jiangsu Jet, operates five charter aircraft. The top 0 operators in Mainland China account for 6% SUMMER 08 CHARTER REPORT 7

30 7+6+G 6 AUSTRALIA The Australian business jet charter market is the second largest in the Asia- Pacific region, next only to Mainland China, with 6, of its nearly 00 business jets available for charter. The demand for charter is primarily for travel within the country, with % of the charter fleet belonging to the light sized category. Cessna and Bombardier are the top charter jet OEMs and have a charter fleet of and aircraft, respectively. Tourism, one of the major industries in Australia, is the main driving force for the rise in the charter market. The untamed and unspoiled wilderness proves to be the major tourist attractions in the region. However, climate change and global warming are already and will continue having an adverse effect on these attractions. The shortening of the seasons and rise in temperatures of ocean waters are having a detrimental effect on ski and coastal tourism, which ultimately reduces the number of tourists and therein the demand for tourist-charter. Charter Fleet by OEM IAI (%) Gulfstream (%) Charter Fleet by Size Category Long-Range (6%) Hawker (%) Embraer (8%) Dassault 7 (%) G 6 Bombardier (%) Cessna (9%) Mid-Size 0 (%) Large (7%) G 6 Light 8 (%) Very Light (9%) Top Charter Operators by Model Australian Corporate Jet Centres Flight Options Revesco Aviation Global Jet International ExecuJet Falcon Air Maxem Aviation Challenger 600 () Global Express XRS () Global Express () Phenom 00 () Challenger 60 () Falcon 0F- () Citation II/SII/ Bravo () Citation Ultra () Citation Mustang () Hawker 00A () Falcon 0 () Citation VII () Falcon 900C () Challenger 60 () Challenger 60 () Phenom 00 () Global Express XRS () Challenger 60 () Hawker 800XPI () Global 6000 () Falcon 000 () Hawker 80XP () Citation Encore+ () Citation I/SP () Citation III/ VI/VII () Falcon 0 () Citation Bravo () Citation Sovereign () Citation Ultra () Citation SII () Machjet Int l Other Charter Operators JetCity Corporate Aircraft Charter Edwards Aviation Australia Southern Cross Jets Shortstop Jet Charter Avcair Executive Airlines Oberon Aviation Services Airmed Australia Aus West Airlines (00) Inflight ER Air Gold Coast Light Jets Australia Learjet () Citation X () Citation II () Citation () Citation VII () Citation () TOTAL Citation Ultra () Citation CJ () Citation CJ () G-IV () 8 SUMMER 08 CHARTER REPORT

31 AUSTRALIA Age Distribution by Model LONG- RANGE Global Express XRS Global 6000 Global Express LARGE Challenger 60 Challenger 600/60 Falcon 900C Legacy 600 G-IV/IV-SP Falcon 000EX EASy G0 MID-SIZE Falcon 0F- Citation Sovereign Falcon 0 Learjet 60 Hawker 80XP Citation X Hawker 800/XPI LIGHT 9 Citation II/SII/Bravo Citation III/VI/VII Citation Ultra/V Citation CJ/+ Learjet 0/ Westwind / Citation I/SP Learjet Phenom 00 Citation Encore+ Hawker 00A Learjet VERY LIGHT Citation Mustang Citation /CJ Phenom 00 Year of Manufacture SUMMER 08 CHARTER REPORT 9

32 +8+G 9 INDIA With a total of 9 business jets, of its total 0, dedicated for charter, India is home to the third largest charter fleet in the Asia-Pacific region. Around 60% of the fleet is comprised of large and medium sized aircraft. Dassault and Cessna are the top charter jet OEMs in the country and have a charter fleet of 6 and aircraft, respectively. The largest operator in the region is Club One Air with eight jets. The UHNWI population has grown to,90 and is expected to continue growing at an exponential rate for the foreseeable future. With a growing count of UHNWIs, India shows a strong potential for growth in the charter market. The benefits of a dependable, quick, easy-to-order, on demand charter service is a welcomed privilege for many upper class wealthy individuals in India. Charter Fleet by OEM Charter Fleet by Size Category Gulfstream (%) Airbus (%) Very Light (7%) Corp. Airliner (%) Embraer 6 (0%) Hawker 0 (7%) G 9 Dassault 6 (7%) Bombardier (9%) Cessna (%) Long-Range (8%) Mid-Size (9%) Light (%) G 9 Large (%) Top Charter Operators by Model 8 7 Club One Air Reliance Commercial Dealers Ltd. Air One Aviation Religare Aviation Air Charter Service Falcon 900EX EASy () Legacy 60 () Falcon 000 () Citation Excel () Falcon 000 () Global Express () Lineage 000 () Falcon 7X () Falcon 000LX () ERJ-ER () Citation XLS () Citation II () Global Express XRS () Citation Excel () ACJ9 () CRJ00() Global 6000 () Other Charter Operators VRL Logistics Taj Air Privilege Airways Forum Aviation Titan Aviation GMR Aviation Zest Aviation Empire Aviation Group Simm Samm Airways Punj Lloyd Futura Travels EIH Bajaj Auto U.Y. Aviation Grasim Industries Raymond Int l Air Charter Operations Span Air Coromandal Travels Taneja Aerospace & Aviation Abhijeet Projects Turbo Aviation Pinnacle Air Airmid Aviation Services Private Dove Airlines Private IRM Jupiter Aviation Services TOTAL 0 SUMMER 08 CHARTER REPORT

33 INDIA Age Distribution by Model CORP. AIRLINER Lineage 000 ACJ9 LONG-RANGE Global Express Falcon 7X Global Express XRS Global 000 Global 6000 LARGE 9 Falcon 000EX EASy Falcon 000LX Legacy 60 Falcon 900EX EASy Challenger 60 Challenger 60 CRJ00 ERJ-ER MID-SIZE Hawker 80XP Challenger 00/0 Hawker 800/XP/XPI G0 Hawker 900XP G00 Hawker 70 LIGHT Citation CJ/+ Citation Excel/XLS/+ Citation II/SII/Bravo Premier I/IA VERY LIGHT Premier I/IA Citation Mustang Phenom 00 Year of Manufacture However, even though the UHNWI population is growing year-onyear, the charter fleet operated locally in the region is not following the same trend. The local charter fleet has seen a reduction of one aircraft, from a total of 60, since 06. The strict regulatory environment surrounding the charter market which prevents any foreign entity from making investments in the business aviation charter market proves to be a major obstacle to the growth of the charter market. SUMMER 08 CHARTER REPORT

34 8+7+G PHILIPPINES The charter market in the Philippines is moving slowly due to operational limitations in Manila and an announcement of possibly moving general aviation out of the city s largest international airport Ninoy Aquino International Airport. Alternative solutions are being put together via Clark airport and with helicopter transfer. With a total of 8 business jets in the country, are utilized in the charter sector, representing % of the Asia-Pacific charter fleet. Up from 0 jets in 06, the island country has recorded a 0% fleet increase. Charter Fleet by OEM Charter Fleet by Size Category Cessna (8%) Large (%) IAI (8%) Gulfstream (%) G Hawker (%) Bombardier 7 (%) Mid-Size (%) +++G Light 7 (%) Top Charter Operators by Model 6 Asian Aerospace Learjet () G0 () G-IV () Other Charter Operators Challenger Aero Air Hawker 800/XP () Lionair Aviation Concepts TOTAL Challenger 00 () World Aviation Corporation Learjet 0 () Citation XLS+ () Bombardier had the most aircraft in the Philippines, with seven (%), while Hawker and Gulfstream followed with two jets each. The light jet was the most popular size group, with the remaining being mid-size and large aircraft. The average age of the country s charter fleet is 0 years. of the country s charter fleet, consisting of mainly Learjet aircraft, which is also the most popular aircraft used for charter in the country. Challenger Aero is the second largest operator, with three aircraft. There are five charter operators in the Philippines. The largest operator, Asian Aerospace, expanded its fleet by two aircraft between 06 and 08, from four to six jets. It operates 6% SUMMER 08 CHARTER REPORT

35 SINGAPORE 6+7+G Singapore is one of the most important business aviation hubs in the Asia Pacific; it is also home to charter jets and seven charter operators. With the new terminal currently under construction, Seletar Airport is looking to strengthen its position as the main base for business jets in Singapore. There has been a lot of foreign investments into the city-state. Quite a few international corporations have their offices based in Singapore; it is also a popular location for global events and business meetings. This makes the country a frequent destination for business trips, one of the many reasons for its thriving business jet charter industry. Charter Fleet by OEM Charter Fleet by Size Category Embraer (8%) Light (%) Large (8%) Gulfstream (%) 6++8+G Bombardier 8 (6%) Mid-Size (%) G Long-Range 6 (6%) Top Charter Operators by Model Pacific Flight Services G0 () Learjet () Other Charter Operators OJets Learjet () Global 6000 () Challenger 60 () G0 () Prime Jet Avcair Seletar Jet MyJet Asia Orient Global Aviation TOTAL Pacific Flight Services continues to be the largest charter operator in Singapore with five jets based locally. It offers jet charter, aircraft management, as well as flight training. With three jets available for charter, the second largest operator is now OJets, a new player in the market, replacing the vacancy that was left behind by Zetta Jet s cease of operation. Despite the deductions in Singapore s overall business jet fleet in 07, the total size of its charter fleet has not seen any change since 06. This is mainly due to the maturity of the country s charter market, and the stable demand for charter service. The most popular aircraft size category in Singapore s charter market is long-range, with a total of six (6%) jets on its fleet. There are four mid-size jets, two light jets and one large jet. Bombardier is the most popular OEM (6%), followed by Gulfstream (%). The average age of this fleet is years, three years younger than the region s average. SUMMER 08 CHARTER REPORT

36 +67+G THAILAND In recent years, increasing efforts and resources have been allocated to the aviation industry to support its development and demand from the tourism segment in Thailand. Further local development plans have been adopted to support this growth. For example, the construction of the new Betong Airport, serving the southern province of Yala, has just begun. The new airport will eventually facilitate the economic development and security in the far south of the country. Out of the Thailand s 7 business jets in 08, of them serve the charter industry, representing % of the Asia-Pacific charter fleet. Despite Thailand s decrease in charter fleet size, from 6 jets to, the country still has one of the largest fleets for charter among the Southeast Asian countries. Charter Fleet by OEM Charter Fleet by Size Category Dassault (7%) Hawker (%) Long-Range (%) Very Light (8%) Cessna (%) +++7+G Gulfstream (%) Light (%) +++8+G Mid-Size 7 (%) Top Charter Operators by Model MJets Siam Land Flying Company G00 () Hawker 80XP () Citation CJ () HAWKER 800 () G-V () Citation Bravo () Citation X () Other Charter Operators VIPJets Kannithi Aviation Air Alsie A/S H.S. Aviation TOTAL Advance Aviation G00 () Aircraft from four OEMs Hawker, Gulfstream, Cessna and Dassault make up the entire charter fleet in Thailand, with the previous three having four each and the latter with one. Mid-size jets are the most popular in the country, making up % of the market. The Gulfstream 00 is the most favorable model, with a % market share. The charter fleet in Thailand has an average age of years, which is relatively young compared to the entire Asia-Pacific fleet. Seven companies operate a charter aircraft, as of summer 08, four of which only operate one aircraft for charter. MJets had the largest fleet, with five aircraft, although the operator s fleet dropped by one aircraft from 06 to 08. Siam Land Flying Company and Advance Aviation each operate two jets for charter, and both had the same fleet size from 06. SUMMER 08 CHARTER REPORT

37 JAPAN 0+80+G Japan offers business jets for charter, one more than the summer 06, accounting for % of the total business jet fleet in Japan. The overall business jet fleet, however, has not changed. Corporate and long-range jets make up 6% of the market. Four light jets and one mid-size jet fulfill the domestic traveling needs for private individuals and corporations in the country. Consequently, Cessna is the most popular OEM for jet charter. Although there is little change in the total number of fleet for charter based in the country, a new operator emerged in the market. Phenix Jet has, in recent years, become the largest charter operator in Japan, offering domestic flights, as well as international flights. It has five jets for charter, including those that are not based in Japan, all of them are longrange jets. Shizuoka Air, which is also called Fuji Dream Aviation, operates two jets, with its main base at Shizuoka Airport. Shizuoka Air caters exclusively to the domestic market. Jet Aviation operates two jets. Nakanihon Air also operates two aircraft. Charter Fleet by OEM Charter Fleet by Size Category Airbus (8%) Bombardier (6%) Gulfstream (8%) G Cessna (8%) Light (%) G Corp. Airliner (8%) Mid-Size (7%) Long-Range 7 (%) Top Charter Operators by Model Phenix Jet G60/ER () Andrew Svoboda Phenix Jet Shizuoka Air Citation CJ+ () Global 6000 () HOW HAS THE CHARTER MARKET EVOLVED IN JAPAN OVER THE PAST FEW YEARS? Jet Aviation Nakanihon Air G60 () ACJ8 () Citation V () The Japan Charter market continues to grow and increase in demand. Phenix Jet is seeing more and more requests for charter services, especially long haul flights. The market is evolving amongst all key sectors of private, corporate and government entities that demonstrate an increased need for charter services. WHAT ARE SOME OF THE CHALLENGES THE MARKET FACES? Other Charter Operators Avjet Corporation Aero Asahi TOTAL Providing enough charter available aircraft to service the growing demand is one of the biggest challenges. Phenix Jet has, in recent years, become the largest charter operator in Japan, offering international flights with multiple safety audit ratings which represent highest standards of safety and high quality of hospitality services. Phenix Jet has five jets for charter, including those that are not based in Japan, all of them are ultra-long range jets. CONTACT: charter@phenixjet.com SUMMER 08 CHARTER REPORT

38 +78+G MALAYSIA Malaysia s continued economic growth has pushed the country closer to reaching high-income status. However, its wage levels have not increased proportionally compared to its economic growth rate. This lag has created a challenge for various industries, including business aviation. Still, within the charter market, operators have capitalized on increasingly popular medical tourism sought out by inbound tourists. Malaysia has positioned itself as a preferred destination for a variety of medical treatments, a unique market charter operators have the opportunity to explore. Despite having an increase in overall business jet fleet size, Malaysia s charter fleet contracted by three aircraft between 06 and 07, to jets; a 0% decrease. The Malaysian market represents % of the total Asia-Pacific charter fleet. Charter Fleet by OEM Charter Fleet by Size Category Dassault (8%) Gulfstream (7%) Bombardier (%) G IAI 6 (0%) Large (%) G Long-Range (7%) Mid-Size (8%) Light 6 (0%) Top Charter Operators by Model 6 Executive Jet Asia Westwind / (6) Other Charter Operators TAG Aviation Global Express XRS () FlyJet Air Alsie A/S Berjaya Air Global Air Charters TOTAL G0 () Israel Aerospace Industries (IAI) has the largest market share in Malaysia s charter market, with six aircraft taking up 0% of the country s market share. Bombardier followed with three aircraft, representing % of the market. As of June 08, there were seven business jet charter operators in Malaysia. Executive Jet Asia (EJA) was the largest operator, holding a fleet of six Westwind aircraft. TAG Aviation ranked second, in terms of fleet size, with a two aircraft fleet. Among all size categories, light jet dominated the Malaysian market with six aircraft (0%), while large jet has three aircraft (%) on the market. Additionally, Malaysia has the oldest charter fleet among the Southeast Asian countries, with an average age of years. 6 SUMMER 08 CHARTER REPORT

39 HONG KONG & MACAU 7+7+G The business jet fleet available for charter in the Hong Kong and Macau markets decreased to, accounting for 7% of the region s total 9 business jets. The market scale has remained relatively stable, with a mere % decrease of the charter fleet. The majority of aircraft used for charter in this region are made up of the Bombardier Global series (, 6%). There are also three Gulfstream aircraft (7%) providing charter service. Dassault Falcon, Airbus, and Boeing each make up 9% of the market share. The charter market in Hong Kong and Macau is dominated by large-sized and long-range aircraft. Hongkong Jet, Global Jet Concept and Tag Aviation are the top three charter operators in the region, each with two aircraft available for charter. Charter Fleet by OEM Charter Fleet by Size Category Airbus (9%) Boeing (9%) Dassault (9%) G Bombardier (6%) Gulfstream (7%) Large (7%) +7+8+G Corp. Airliner (8%) Long-Range 6 (%) Top Charter Operators by Model Hongkong Jet Global Jet Concept TAG Aviation G00 () Global 000 () Global 000 () BBJ () ACJ9 () G0 () Carmen Chan Asian Sky Group HOW HAS THE CHARTER MARKET EVOLVED IN HONG KONG OVER THE PAST FEW YEARS? We have seen a steady growth in the charter market in Hong Kong. The younger generation of HNW and UHNWIs has started to use more charter flights for personal and business use. Still, the preference for long range and large cabin aircraft continues to be a dominant trend. Other Charter Operators Empire Aviation Group Jet Aviation White Wind Lily Jet Macau Jet Int l TOTAL WHAT ARE SOME OF THE CHALLENGES THE CHARTER MARKET FACES? The industry is still under the constraints of insufficient time slot issues at the Hong Kong airport, which seriously hinders the development of the industry. Additionally, there has been an emergence of Part 9 aircraft owners in Hong Kong and China who also provide charter services. Because potential charterers can often not identify the difference between Part 9 (private) operations and the more strict and regulated Part (charter) operations, clients will go for the operation with the lower pricing. This causes unnecessary competition and is a situation that needs to be rectified by the government. CONTACT: charter@asianskygroup.com SUMMER 08 CHARTER REPORT 7

40 OTHER MARKETS +78+G 0 INDONESIA +76+G NEW ZEALAND 7+8+G Insufficient infrastructure and restrictive regulations have acted as a headwind to business aviation development in Indonesia, although the country has gradually relaxed its restrictions towards foreign-registered aircraft in recent years. As of June 08, there were 0 business jets operating for charter in Indonesia, accounting for % of the charter fleet in the region. Decreasing from aircraft in 06, the Indonesian charter fleet contraction was due to a fleet reduction by the largest charter operator in the country, Premiair. Premiair reduced its charter fleet from five aircraft to two within a two-year time frame. Embraer had the largest market representation in the charter market, with a 0% share. Hawker aircraft follows, with a 0% market share. Large aircraft are the most favorable aircraft size in Indonesia, making up 60% of the fleet, while mid-size and corporate airliner shared the remaining market. The Legacy 600 and Hawker XP were the top two models; each had three aircraft in the country. In addition, Indonesia has the youngest charter fleet in the region, with an average age of 0 years. TAIWAN 6+8+G New Zealand currently has four jets available for charter; one more than what was available in summer 06. The charter fleet accounts for % of the country s total business jet fleet, which stands at 7. There are only two local operators, Skyline Aviation and Pacific Jets, operating three and one aircraft, respectively. Skyline Aviation, the country s largest charter operator, operates a Nextant 00XTi (seating capacity of seven), Citation Mustang (seating capacity of four) and a Sovereign (seating capacity nine), all of which are typically for domestic use and for travel to Australia. Skyline Aviation has been operating in New Zealand for over 0 years. Pacific Jets operates a Falcon 000LX, which has a range of,000nm and a seating capacity of 0, in addition to two pilots and a flight attendant. This company has been in operation since 00. SOUTH KOREA The Taiwan charter market has stayed stable with four business jets available for charter, accounting for 7% of its total business jets in Taiwan. Similar to the other markets in the Greater China region, the charter market in Taiwan is also dominated by large and long-range aircraft. The average age of the charter fleet in Taiwan is years, slightly older than that of Mainland China. Executive Aviation Taiwan is the biggest local charter operator with one Bombardier Global 000, one Embraer Legacy 600 and one Hawker 00XP. This operator also has the capability to provide charter service for medical use. Win Air also has one Gulfstream G0 available for charter. South Korea s charter industry experienced a late start, compared to the rest of the region. Enthusiasm did not grow for jet charter until a little over a decade ago. Individuals and corporations who require frequent travels have, in the past, preferred their own aircraft. However, as huge conglomerates cut costs, and as the popularity of charter spreads, the demand for such a service has increased. Currently, South Korea s flagship airline carrier, Korean Air, is the largest and the only operator in South Korea, with three jets for charter. Those include one BBJ, a Global Express XRS and a Gulfstream G60ER, all of which cater to longrange international flights, reaching all of Asia from Seoul. 8 SUMMER 08 CHARTER REPORT

41 CHARTER FLEET BY OEM AIRBUS ++ MOST POPULAR ACJ9 AVERAGE AGE OF FLEET 0 BOEING MOST POPULAR BBJ AVERAGE AGE OF FLEET 9 India Macau Japan Mainland China South Korea Hong Kong Indonesia ACJ8 ACJ9 Total BBJ 6 9 Total 7 0 BOMBARDIER MOST POPULAR Challenger 80 AVERAGE AGE OF FLEET Mainland China Australia India Singapore Philippines Hong Kong Malaysia Japan Taiwan South Korea Challenger 00/0 8 Challenger 600/60 Challenger 60 6 Challenger Challenger 60 Challenger 80 CRJ00/00 Global Global Global Express Global Express XRS 6 Learjet Learjet Learjet 0/ Learjet 60/XR Total SUMMER 08 CHARTER REPORT 9

42 CHARTER FLEET BY OEM CESSNA MOST POPULAR Citation II/SII/Bravo AVERAGE AGE OF FLEET Australia India Japan Thailand New Zealand New Caledonia Philippines Mainland China PNG Citation /CJ Citation CJ/+ 0 Citation CJ Citation CJ Citation Encore+ Citation Excel/XLS/+ 7 Citation I/SP Citation II/SII/Bravo 9 Citation III/VI/VII Citation Mustang 8 Citation Sovereign Citation Ultra/V Citation X Total 6 DASSAULT MOST POPULAR Falcon 000/EX EASy AVERAGE AGE OF FLEET 8 7 India Mainland China Australia New Zealand Malaysia Thailand Bangladesh Macau Falcon 000/EX EASy 9 Falcon 000LX 6 Falcon 0F- Falcon 0 Falcon 7X 6 0 Falcon 900C Falcon 900EX EASy Falcon 900LX Total SUMMER 08 CHARTER REPORT

43 CHARTER FLEET BY OEM EMBRAER MOST POPULAR Legacy 60 AVERAGE AGE OF FLEET HAWKER MOST POPULAR Hawker 800/XP/XPI AVERAGE AGE OF FLEET Mainland China India Australia Indonesia Taiwan Singapore India Mainland China Thailand Indonesia Mainland China Japan Singapore Thailand Hong Kong Philippines India Australia Malaysia South Korea Indonesia Taiwan Australia Philippines Taiwan ERJ-ER Legacy Legacy 60 7 Lineage 000 Phenom 00 Phenom 00 Total Hawker 00A Hawker 00XP Hawker 70 Hawker 800/XP/XPI Hawker 80XP Hawker 900XP Premier I/IA Total GULFSTREAM MOST POPULAR G0 & G0 AVERAGE AGE OF FLEET G0 G00 7 G80 G00 G0 7 G0 7 G60/ER 6 G-IV/IV-SP G-V Total 0 7 SUMMER 08 CHARTER REPORT

44 CHARTER MOBILE APPS Mobile phones have become an essential part of our everyday life and mobile apps have made it increasingly easy to conduct all sorts of business from the convenience of a handheld device. Booking a charter flight is no different. The industry has caught onto this craze, understanding the ease and efficiency an app can bring. Still, the availability of charter apps is limited and many stop just short of providing a truly mobile experience. Typically, users can expect to see three different types of mobile apps when looking to book a charter. The first type was developed by charter brokers and is the category most available charter apps fall into. To book a charter through these apps charter requirements are needed, including expected departure and arrival time, date and airport, as well as passenger number and aircraft size category. These apps will then perform a search and list out several different flight plans with estimated costs and aircraft model. Upon selection, the app will provide an online form for the client to fill out and customer service staff will get back to the client with confirmation and a final service quotation. An example of this app is UK-based broker, Air Charter Service, which has regional offices available for booking in the Asia Pacific. Air Charter Service (ACS) The second type of charter app is offered directly by charter operators, who are looking to fill empty leg flights. Typically, no login is required to view the flights. Clients simply fill out their charter requirements and, like booking a commercial flight, seats capacity can be viewed. Users of this kind of charter app tend to be more random, making it difficult for the operator to maintain this client base. India-based operator JetSetGo offers this service through its JetSteals app. Deer Jet The third type of charter mobile app, also launched by charter operators, is quite different from the previously mentioned one. These mobile apps only allow its member to login, which means you need to join its charter membership program first. Customers are required to pay an initiation fee to be a member of their charter program. Clients then have access to the mobile app and can book a charter flight and pay instantly. In the US, on-demand charter company Skyjet offers this service through its mobile app, allowing users to book and pay in an instant. Japan-based company SkyTrek, which offers small aircraft charter service, offers a similar service book and pay through an app. Still, the Asia-Pacific region has yet to see a mobile app offering booking and payment options for business jet charter. While the aim for charter mobile apps is to simplify the booking process and save charter customer s time, this kind of mobile service is much more common in the U.S. and Europe, where charter regulations are more relaxed. In the Asia Pacific, where the industry is still evolving and regulations are more tight, mobile charter apps have a way to go. Still, charter apps in Mainland China stood out as being more developed than in the rest of the region; contributing to its fast-growing charter industry in the region. India, known for its fast-growing IT industry, is also notable for its availability of charter apps. Ananjets SUMMER 08 CHARTER REPORT

45 JET CHARTER MEMBERSHIPS Loyal customers are a vital part of any business, and charter businesses are no different. Membership programs, or jet cards, are a good way to help operators both attract potential clients and keep loyal clients. While charter membership programs in Asia Pacific aren t as popular as in North America and Europe, there are a growing number of operators and brokers offering membership schemes, with the promise of flexibility and a stress-free flying experience. Hourly rate tend to be the most considered factor when choosing a program, but the increasing demand for membership programs means the schemes have become more complex. Standard membership schemes often include an initiation and/or annual fee, incremental hourly packages, a level of guarantee on aircraft availability and VIP perks. Charter operators with large-scale operations typically have a digital booking platform, through a mobile app or booking website, making it easy for members to access flight information. In the US, JetSmarter operates in this fashion. Upon a one-time initiation fee and an annual membership fee, members of JetSmarter have discounted access to empty legs, as well as on-demand chartered private or shared flights. The company s online booking system and app are heavily marketed and make it easy to schedule flights. JetSmarter recently made its model even more accessible, introducing on-demand charter flights to non-members through a pay-as-you-go option. Similarly, in Japan, Sky Trek is making a name for itself after launching the country s first membershipbased small aircraft charter service. Initiation and annual fees are required, then providing members access to a fleet of turboprop aircraft. Sky Trek s mobile app allows its members to book charters, airline tickets and even hotel rooms. In the Asia-Pacific region, operators are moving toward more accessible and attractive membership models. China-based operator Deer Jet, which launched its membership program in 0, is the biggest charter operators in the region and offers three different membership card programs: Youxiang Card, Aoxiang Card and Changyou Card. With the Youxiang Card and Aoxiang Card, members are offered 0 and 0 charter flight hours (including ferry), respectively, on a Gulfstream G0. The G0 can be switched to a Falcon 7X, G0, G60 or Boeing BBJ, with different hourly rates. The Youxiang Card is valid for months, while the Aoxiang Card is valid for 8 months. Along with a longer period of validity, the Aoxiang Card also includes two expedited flight applications, five allowances for VVIP-level flight control service at any airport in Mainland China and pick-up service eight times. The Youxiang Card also includes the above services at no cost, with limited service times. For both Card holders, Deer Jet also prepares a toiletries package for long distance, overnight flights. The more premium membership program offered through Deer Jet is the Changyou Card. This program requires clients to pay 0,000,000 RMB (approx. US$. million) as an advance payment. When clients request a charter, charges will be deducted from the advance payment. Under this program, members can choose five different aircraft models (G0, G0, G60, BBJ and BBJ), with different hourly rates. This program is valid for months. Beijing and Hong Kong-based charter operator Sino Jet, which set up its operations in 0, operates a fleet of four aircraft. The company offers three types of membership programs, based on hourly increments of 00 hours, 00 hours, and 00 hours. In addition to charter operators answering the demand for membership schemes, so are brokers, who are finding more ways to maintain a loyal customer base. Global charter broker Air Charter Service offers clients a pre-paid membership card program, the Empyrean Card. Unlike fixed membership programs launched by charter operators in the market, Air Charter Service has taken a more bespoke approach, designing membership programs based on individual client needs. With the tailor-made card program, clients are free to choose the flight hours and validation period based on their specific need. As the charter market in the Asia Pacific becomes more active, operators and brokers are expected to offer more diversified and tailored membership models. Air Charter Service Deer Jet Sino Jet Hong Kong China Hong Kong SUMMER 08 CHARTER REPORT

46 POPULAR MODELS FOR CHARTER SUMMER 08 CHARTER REPORT

47 POPULAR MODELS FOR CHARTER Corporate Airliner Airbus ACJ8 EXTERIOR FLOOR PLAN INTERIOR CROSS SECTION 70. ft 7. ft. ft RANGE FROM HONG KONG NOTE: The range map displayed used the following assumptions: 8% probability average annual NOAA 0-years historical winds, ISA flight conditions, NBAA IFR fuel reserves, typical passenger and crew loads. SUMMER 08 CHARTER REPORT

48 POPULAR MODELS FOR CHARTER Corporate Airliner Boeing BBJ (C) 08 Conklin & de Decker Associates EXTERIOR FLOOR PLAN INTERIOR CROSS SECTION 79. ft 7. ft. ft RANGE FROM HONG KONG NOTE: The range map displayed used the following assumptions: 8% probability average annual NOAA 0-years historical winds, ISA flight conditions, NBAA IFR fuel reserves, typical passenger and crew loads. 6 SUMMER 08 CHARTER REPORT

49 POPULAR MODELS FOR CHARTER Long-Range Bombardier Global 6000 (C) 08 Conklin & de Decker Associates EXTERIOR FLOOR PLAN INTERIOR 8. ft CROSS SECTION 6. ft 8. ft RANGE FROM HONG KONG NOTE: The range map displayed used the following assumptions: 8% probability average annual NOAA 0-years historical winds, ISA flight conditions, NBAA IFR fuel reserves, typical passenger and crew loads. SUMMER 08 CHARTER REPORT 7

50 POPULAR MODELS FOR CHARTER Long-Range Gulfstream G0 (C) 08 Conklin & de Decker Associates EXTERIOR FLOOR PLAN INTERIOR 0. ft RANGE FROM HONG KONG CROSS SECTION 6. ft NOTE: The range map displayed used the following assumptions: 8% probability average annual NOAA 0-years historical winds, ISA flight conditions, NBAA IFR fuel reserves, typical passenger and crew loads. 7. ft 8 SUMMER 08 CHARTER REPORT

51 POPULAR MODELS FOR CHARTER Long-Range Falcon 7X (C) 08 Conklin & de Decker Associates EXTERIOR FLOOR PLAN INTERIOR 9. ft RANGE FROM HONG KONG CROSS SECTION 6. ft NOTE: The range map displayed used the following assumptions: 8% probability average annual NOAA 0-years historical winds, ISA flight conditions, NBAA IFR fuel reserves, typical passenger and crew loads. 7.7 ft SUMMER 08 CHARTER REPORT 9

52 POPULAR MODELS FOR CHARTER Large Gulfstream G0 EXTERIOR FLOOR PLAN INTERIOR. ft RANGE FROM HONG KONG CROSS SECTION 6. ft NOTE: The range map displayed used the following assumptions: 8% probability average annual NOAA 0-years historical winds, ISA flight conditions, NBAA IFR fuel reserves, typical passenger and crew loads. 7.7 ft 0 SUMMER 08 CHARTER REPORT

53 POPULAR MODELS FOR CHARTER Large Challenger 80 EXTERIOR FLOOR PLAN INTERIOR 8. ft RANGE FROM HONG KONG CROSS SECTION 6. ft NOTE: The range map displayed used the following assumptions: 8% probability average annual NOAA 0-years historical winds, ISA flight conditions, NBAA IFR fuel reserves, typical passenger and crew loads. 8. ft SUMMER 08 CHARTER REPORT

54 POPULAR MODELS FOR CHARTER Large Falcon 000 EXTERIOR FLOOR PLAN.0 ft INTERIOR RANGE FROM HONG KONG CROSS SECTION 6. ft 7.7 ft NOTE: The range map displayed used the following assumptions: 8% probability average annual NOAA 0-years historical winds, ISA flight conditions, NBAA IFR fuel reserves, typical passenger and crew loads. SUMMER 08 CHARTER REPORT

55 POPULAR MODELS FOR CHARTER Mid-Size Hawker 80XP EXTERIOR FLOOR PLAN. ft INTERIOR RANGE FROM HONG KONG CROSS SECTION.8 ft NOTE: The range map displayed used the following assumptions: 8% probability average annual NOAA 0-years historical winds, ISA flight conditions, NBAA IFR fuel reserves, typical passenger and crew loads. SOURCES: OEM, Aviapages 6.0 ft SUMMER 08 CHARTER REPORT

56 SUMMER 08 CHARTER REPORT