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Jun
2015

Luxury yachts & Private jets December 2013

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Open skies become a possibility

We have reported on the private aircraft market on a number of occasions in the past, the size of the country and desire of the wealthy to fly themselves or be flown for business or leisure reasons is a real draw. In the past month, new regulations related to taking flying lessons, and airspace restrictions make this a greater possibility. The significant relaxation of airspace control including the abolishment of pre flight plans many days in advance will make it far more attractive for individuals to own private planes and to learn to fly.

In the minds of the Chinese over the past decade, obtaining a private pilots license and taking to the skies seemed unlikely. To enable more people to realise a dream of flying their own aircraft and to boost the general aviation sector, the Civil Aviation Authority of China (CAAC) released new regulations and eased requirements for trainee pilots on 1st December. Flight enthusiasts, and especially HNWIs are definitely eager to learn to fly, as another symbol of success.

Liu Bo, a 38 year old SME owner earning over One Million RMB per year, signed up to join a private pilot course. “A few days ago, I saw the news that CAAC had eased the standard which really tempted me. I have had a dream of flying since my childhood and this is an opportunity to realise it. After careful research, I picked a suitable flight school and the tuition costs about 260,000 RMB.”

The new regulation

As of 1st December 2013, China’s ‘General aviation mission approval and management regulations’ take effect. The CAAC issued 3 consecutive advisory circulars to ease the standards of application for a private pilot license in 3 areas.

In the past, for Chinese wealthy, the tuition cost was never a hindrance, but the strict physical health standards was an issue. At that time, personal health requirements for private aircraft pilots were as stringent as for those wishing to fly commercial aircraft and few wealthy could meet them. According to Zhong Ning a spokeswoman for the CAAC, there are currently only 345 people in China holding a private pilots license before the new regulations came in.

But now requirements for height, weight and eyesight have been altered and those who have chronic diseases’ like diabetes, hypertension or coronary artery disease, who would have been disqualified in the past, are allowed under the new rules to take flight courses. The requirements have now become as flexible as those for car drivers and it is expected that over 90% of people will qualify. Our view of the regulation is that it will greatly stimulate more people to train as a private pilot and will also develop the domestic general aviation market, one that could become the largest in the world.

The training process

According to the new regulation, those aged 17 or above who have received at least three years of education at a middle school are eligible to apply for a private pilot’s license. After 40 hours of theoretical studies followed another 40 hours of flight training and exams for both, the trainee will be awarded a private pilots license, applicable for non-commercial flights only.

Although the training standards were loosened, the tuition is still very expensive for all but the affluent and wealthy. Learning to fly a single-engine light aircraft as an example, is likely to cost at least 150,000 RMB in tuition fees to a maximum of 338,000 RMB according to the training school attended. At present, the CAAC has authorised 13 medical examination agencies for private pilot license applicants in 10 cities and 40 pilot training schools across the country.

Obtaining a private pilots license can be divided into five basic steps, and is based on the training courses of several schools we questioned. Full-time study is expected to normally take 6 months to complete, and the process may extend to one year if the trainee chooses part-time study. As we know, wealthy Chinese individuals are generally very busy and probably could not follow the prescribed timeline of the training progress and their study period will certainly have to be extended. In addition, when compared to the training requirements, the number of training schools is relatively small, which will as a result, mean that it will take 2-3 years before a number of wealthy are finally awarded their private pilots license.

The civil aircraft sector in China is excitedly anticipated. Based on the large number of HWNI’s in China, even if 1% of them are willing to take their license and buy a private plane, this will create a huge market.

The attitude of trainees

Many people are eager to be in possession of a private pilots license, and most of the training schools are now full after the new regulations took effect. The first few groups of students are businessmen or enterprise owners aged 30-35, with ‘time and money’ to persue their passion. They have applied for a private pilots license with the purpose of having fun or to be the first person in their circle who can fly a plane by themselves, and many have claimed that they will buy a private aircraft if they can pass the exam. The future interest remains to be seen.


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