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Hermes teacups, mahjong sets favoured sky bling for Asia tycoons
[SINGAPORE] Hermes tea sets. Burberry divans. Chanel blankets. Put those on the shopping list if you want to fly like a tycoon in Asia.
And don't forget the mahjong table and karaoke screen. Bright accents, mahogany and carpets with gold stitching also would help you fit in nicely.
Asia is expected to create more billionaire wealth than the US within a decade, and the proliferation of moguls is expected to spur a buying spree for private jets that will triple the luxury aircraft fleet in Greater China. Gulfstream Aerospace Corp, Airbus Group SE and Bombardier Inc are catering more to local preferences and boosting support services since more than 15 per cent of the global luxury fleet may be based in the region by next year.
"We all believe that the Asian market is going to be huge," said Ang Chye Kiat, executive vice president for aircraft maintenance and modification at Singapore Technologies Aerospace Ltd. "Private entrepreneurs in China have no problems buying an airplane and spending money on it." Billionaires are joining companies and governments in ordering private jets that can cost more than US$70 million before spending on tricked-out interiors and customized painting of the exterior. There were about 16,000 private jets in the world in 2014, Bombardier said.
Asia-based private jet owners have an average net worth of US$1.1 billion, compared with US$520 million among average global owners, according to the Wealth-X and UBS World Ultra Report 2014. Asia owners also are younger and tend to spend almost 40 per cent more on their fleet.
About 9,000 business jets will be delivered through 2024, generating about US$267 billion in revenue for manufacturers, Bombardier said in its business aircraft forecast. About 1,540 of those planes - or 17 per cent - are earmarked for Asia.
Before delivery, there's often an extreme makeover of the interior that can include Bang & Olufsen entertainment systems, Swarovski jewels embedded in the ceiling to mimic twinkling stars and silk carpets with the owner's name woven in the pattern.
"There is a preciousness with Asian clients that appreciates handmade things and, of course, branded things," said Howard Guy, chief executive officer of consultancy Design Q. "Artistry and craftsmanship are something that keeps coming up." The buyers of business jets in Asia typically come from the consumer, real-estate, casino and commodities industries, according to service providers. Those clients typically want a larger plane with longer range, like Bombardier's Global 5000 that starts at about US$50 million, for flights to Europe, said Khader Mattar, vice president of sales in regions including Asia.
Buyers from China used to prefer a more local-style interior, with bright red or orange carpets and gold flourishes, said Jackie Wu, founder and president of Hong Kong-based consultancy JetSolution Aviation Group. Yet as those buyers become more exposed to Western brands and design elements, they are incorporating them into the planes.
Hermes is used for dining ware, teacups, spoons, trash bins and even toiletry dispensers, said Wu, whose company helps buyers find their planes and then customize them. To fill those cups, clients ask for appliances to boil water to precise temperatures, Gulfstream said. Seats can be upholstered in Chanel-patterned leather, and interiors featuring Fendi, Versace and Giorgio Armani brand materials are popular.
"Does luxury have a meaning for billionaires? They are money rich, time poor. The corporate jet is a way to deal with that." One Hong Kong-based client is spending about US$1.3 million outfitting the interior and exterior of a Gulfstream G550 to resemble a red-and-black Ferrari because it is his wife's favourite car, Wu said.
"These are people who are used to five-star hotels and to Michelin-starred restaurants," said Jenny Lau, chief executive officer of Sino Jet Management Ltd, which works with private jet owners. "Every aspect of their lives is led at the highest quality, so it is the same when it comes to their air travel." That includes asking for gold-plated handles on fixtures and gold stitching in divans, Mattar said. Other customers request tables for playing the traditional Chinese tile game mahjong and disco lights for a karaoke entertainment center, said Florian Krauthoff, a sales executive with Germany-based Lufthansa Technik.
Feng shui consultants also study layouts to ensure that toilets don't face sleeping areas, Ang said.
Manufacturers say Asia's current stock market volatility and commodities downturn, and the push by Chinese President Xi Jinping to curb luxury spending, aren't affecting their long-term outlook for the region. China's economy is growing at its slowest rate in a quarter century.
The jets may help Chinese executives embarking on a spree of overseas deals. So far this year, Chinese companies have announced about US$80 billion in outbound deals, almost two-thirds the amount for all of 2015, according to data compiled by Bloomberg.
About 875 business jets from all manufacturers will be delivered to Greater China between 2015 and 2024, with another 665 in the rest of Asia, according to Bombardier. The combined total trails only North American and Europe.
Gulfstream's Asia fleet doubled in five years to 289 last year, and the region is its second-biggest market after the US, Steve Cass, a spokesman, said at the Singapore Air Show last month.
Singapore Technologies Aerospace this year opened a facility in the city-state to maintain, refurbish and customize narrow-body business planes from makers including Boeing Co and Airbus.
"Asia Pacific, in general terms, is the biggest market in the world for the next 20 years," said David Velupillai, marketing director for Airbus Corporate Jets.