Asia’s super-rich eye bargains as second-hand jet market soars

The second-hand purchases that began last year has hardened amid slowing economic growth in the region, while cost-conscious Chinese buyers have shunned flashy symbols of wealth. (Reuters)
Updated 20 April 2018
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Asia’s super-rich eye bargains as second-hand jet market soars

  • Pre-owned jet prices have also seen a steep drop in the past two years
  • It is also helping to firm prices by reducing an oversupply of used business jets on the global market

SHANGHAI: Asia’s super-wealthy are increasingly opting for second-hand private jets rather than buying new ones, as private buyers look for deep discounts and shorter waiting times, aircraft brokers said.
Buyers from the region bought 61 pre-owned aircraft and 54 new jets in 2017, marking the first time second-hand purchases outstripped new orders, according to a report by aviation consultancy Asian Sky Media.
It underscores how a trend that began last year has hardened amid slowing economic growth in the region, while cost-conscious Chinese buyers have shunned flashy symbols of wealth.
Brokers said customers included Chinese companies, which were buying such jets to support overseas expansion and opting for used planes to keep costs down. Pre-owned jet prices have also seen a steep drop in the past two years, they said.
“Customers have changed, their knowledge of the industry has changed and they now understand the value of a pre-owned aircraft,” Jeffrey Lowe, managing director of consultancy Asian Sky Media, said on the sidelines of the Asian Business Aviation Conference & Exhibition in Shanghai this week.
“The market has had an abundance of supply of late, so they were able to find good airplanes at good prices too which were not necessarily all that old and still under warranty. So that has certainly spurred the market.”
Planemakers such as General Dynamics Corp’s Gulfstream and Bombardier Inc. have reduced production in recent years as market demand contracted and they worked on releasing new models, resulting in longer waiting times for buyers.
“The market base has grown,” said David Dixon, president of business jet brokerage Jetcraft Asia.
“Some people who don’t want to spend $60-65 million on one of these, can spend $40 million instead. There’s a lot you can do with $20 million.”
Industry executives said however, that this shift was not negative for planemakers such as Gulfstream and Bombardier, as it was helping to firm prices by reducing an oversupply of used business jets on the global market.
Customers were also attracted by new models being pushed out by planemakers, brokers said.
At the show, Gulfstream showed off its newest G500 and G600 jets, while Bombardier displayed a mock-up of its upcoming Global 7000 long-range plane.
Gulfstream, which rivals Bombardier for the largest share of the Asia-Pacific private jet fleet, said it was confident in the market and that growing maturity of the region’s buyers was a plus for the US planemaker.
“There’s a realization now that these airplanes are really being used for business, they’re business tools,” said Gulfstream’s Senior Vice President of Worldwide Sales, Scott Neal.


Philippines’ richest man Henry Sy dead at 94

Updated 19 January 2019
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Philippines’ richest man Henry Sy dead at 94

  • Henry Sy had a net worth of $19 billion as of Friday, according to Forbes.com
  • Sy helped create mall culture in the Philippines

MANILA: The Philippines’ wealthiest man Henry Sy, who rose from being a penniless Chinese immigrant to leading a multi-billion dollar business empire, died on Saturday, his conglomerate has announced.
The 94-year-old, from the Chinese city of Xiamen, made his fortune with a Philippine shopping center conglomerate that has put up some of the largest malls in the world.
However his holdings also included banks, hotels and real estate in the Philippines, as well as shopping centers in China.
He had a net worth of $19 billion as of Friday, according to Forbes.com.
Forbes said he was the 52nd richest person in the world last year, beating out bold name tycoons like Elon Musk, Rupert Murdoch and George Soros.
“Henry Sy ... passed away peacefully in his sleep early Saturday morning. There are no further details at the moment,” his SM group said in a statement.
Sy put up his first shoe store in downtown Manila in 1956, a business which later grew into a diversified empire.
He stepped down as chairman of his holding firm in 2017, assuming the title of “chairman emeritus” and leaving trusted allies as well as his children in charge of his empire.
It was a long journey for a man who came to the Philippines as a boy to work in his immigrant father’s variety store.
“Our store was so small it had no back or second floor, we just slept on the counter late at night after the store was closed,” he told the Philippine Star newspaper in 2006.
After their shop was destroyed during World War II, Sy’s father returned to China but Henry chose to stay in the Philippines.
He got a commerce degree from a Manila university and started selling shoes in a shop which would later grow into a chain named “ShoeMart.”
By 1972, his shops had branched out into selling all manner of goods, prompting the name to be changed to SM Department Store.
But it was in 1985 that Sy made history when he opened his first “Supermall” in Manila.
Spanning over 424,000 square meters (4.6 million square feet), the mall included dozens of stores, numerous cinemas, restaurants, banks and other attractions that made it a one-stop shop for millions of Filipinos.
This was just the start, as more of Sy’s mammoth malls popped up across the country, some even containing ice skating rinks, a rarity in the tropical country.
Sy helped create mall culture in the Philippines, where steamy temperatures and the regular threat of torrential downpours can make outdoor shopping uncomfortable.
Sy’s holding company, SM Investments Corp. opened its first mall in China in 2001 and has been expanding there as well.
By 2018, SM said it had 70 malls in the Philippines and seven in China as well as six hotels and eight office buildings.
Sy’s empire has earned its share of criticism from labor groups, who say it uses thousands of contractual hires to avoid paying higher wages and benefits that permanent workers are entitled to.
SM officials have insisted that they do not engage in so-called “contractualization,” but say they hire “seasonal” workers for peak periods like Christmas, back-to-school and even weekends.