- Wealthy Americans are turning to Asia for private jets due to a shortage in the US.
- Asia-based aircraft were considered less desirable due to the lack of private aviation infrastructure on the continent.
- One firm, Jetcraft, is buying up aircraft and bringing them to the US to sell.
- See more stories on Insider's business page.
Private aviation has not been immune to the shortages plaguing nearly every industry.
America's wealthy realized the value of flying private instead of flying commercial during the pandemic and began buying up private aircraft in anticipation of a return to travel. And just like in the housing market, a drop in inventory is driving prices up, and forcing buyers to look elsewhere for aircraft.
Jetcraft, an aircraft sales and acquisition firm, has been buying up private jets in Asia and bringing them to the US to accommodate increasing demand. Continued lockdowns in Asia, Jetcraft says, have made owners are more willing to sell.
The firm has already bought up four aircraft in Hong Kong, Malaysia, and Indonesia to hopefully sell to US buyers. The US is by far the largest market worldwide for private jets, but Asia-Pacific is also growing, according to a report by Fortune Business Insights.
A Gulfstream G550 private jet for sale by Jetcraft. Jetcraft
Private jets from Asia were once considered less desirable than US-owned aircraft but are now fetching a premium among the wealthy jet-set.
"There are challenges with Asia compared to the US," Dan Kilkeary, Jetcraft's senior vice president for sales in America, said. "They just don't have the infrastructure like we have in the US to house the airplane."
Getting buyers to Asia to see the aircraft is also costly and has proved difficult during the pandemic thanks to lingering travel restrictions.
Jetcraft, as a result, has been flying the aircraft to the US where they can be serviced by their manufacturers and be easily viewed by potential buyers. Two aircraft are already in the US at Gulfstream and Bombardier service facilities in Illinois and California, respectively.
Minor fixes including removing non-English placards, updating the in-flight entertainment system to English, or converting power outlets to 110v AC are often required. Kilkeary says a paint job — costing a few hundred thousand dollars — is often required for aircraft from Asia.
A Gulfstream G550 private jet for sale by Jetcraft.Jetcraft
"The other thing that should give people assurances on airplanes coming out of almost any region is that the pre-buys now are extensive," Kilkeary said.
Philip Rushton, president of international aircraft sales and acquisition consulting company Aviatrade, told Insider that his firm is selling some aircraft previously based in Asia for around 20% higher than normal pricing due to the shortage.
"Chinese buyers were once focused on buying brand-new aircraft from manufacturers complete with pricey extras, and paying much higher rates in what was known as a 'China premium,'" Rushton said. "But these days, the flow of aircraft into China has expanded to include late model pre-owned aircraft as Asian business jet buyers are more cost-conscious and better informed."
The result has been a sell-off of once-new aircraft with low utilization rates that are now finding their way to homes in America.
Rushton did acknowledge the potential differences compared to US standards and added that "expectations need to be managed" when dealing with US buyers and sellers in Asia. High sales prices can only be obtained if the aircraft has been maintained properly, has been equipped to US standards, and is correctly inspected, he said.