Demand for private business aviation service
Shalini Kumar 
Malaysia accounts for 22% of VistaJet’s traffic and demand is seen to remain healthy

Demand for private business aviation services is expected to remain healthy despite the fairly mature domestic market.

VistaJet, a global business aviation company, sees steady growth in demand for its services in Malaysia, which presently contributes 22% of its customer base. The company started its local operations in 2008.

“Malaysia is ranked second after China in the greater Asia region where we see demand coming from. I think Malaysia has traditionally been a country where business aviation has been pretty advanced, compared with other bigger economies in the region like Japan and Singapore,” its president for Asia Leona Qi tells FocusM.

In the first three quarters of the year, there was a 45% year-on-year growth in international passengers departing from Malaysia and an 18% growth in inbound passenger traffic.

The number of international flights departing from Malaysia grew 12% and inbound flights rose 10%.

She says the well-developed infrastructure as well as the country being a beneficiary of the Asean Open Skies policy are key factors contributing to the rising demand.

“Other countries may not have the same type of infrastructure, and at the same time, we have found there is a lot of know-how when it comes to maintenance of jets here.

“Also, regulation-wise, Malaysia is very business aircraft friendly as there are many countries in Asia that don’t have an open-skies agreement. Malaysia is open so we can pick up and fly,” she adds.

The Malta-based aviation company plans to grow subscription hours from Malaysia by 20-25% in 2017 and 2018, which Qi says will be achieved using a targeted referral strategy from its existing customers.

The average subscription for VistaJet’s services is about 100-200 flight hours per customer, with an average subscription contact of three years, costing US$1.2 mil to US$1.5 mil.

The company relies mostly on its flagship subscription programme to gain clients, which Qi says accounted for 60% of its revenue in the first half-year.


No hub in Malaysia

On whether VistaJet plans to proceed with its previously proposed hub in Malaysia, its chief commercial officer Ian Moore says the company has no plan to set down roots anywhere other than its headquarters in Malta.

He explains that the company aims to keep as much of its fleet in the air as possible, rather than on the ground, to streamline costs.

“Setting up a hub would be counter intuitive. We don’t need one. It’s more of the commercial hubs that are more important rather than an operational one. The biggest cost in this business, other than aircraft, is setting up a safe and efficient operation hub. We prefer to stay as an operation based in Malta,” he says.

Moore says VistaJet had recently taken delivery of new aircraft, doubling the size of its fleet from 35 to 72 planes in past two-and-a-half years.

“We’ve just reached the end of our investment cycle, so now it’s a sales execution plan for me and my team to deliver on the expectations of shareholders, and how much we can make these aircraft work.

“We may not be buying aircraft over the next few years, but that doesn’t mean we don’t have the potential to grow. We’ve taken delivery of aircraft to ensure we have the capacity to grow over the next two to three years,” he says.

VistaJet’s fleet consists of Bombadier Global and Challenger aircraft. Moore says the company has a delivery position for 20 Global 7000 aircraft two years from now.

The global business aviation market is likely to grow 6% per annum, he adds.

This article first appeared in Focus Malaysia Issue 259.