A joint venture between Warren Buffett’s NetJets Inc.and two Chinese investment companies won approval to fly private charters in China as it seeks to tap rising wealth in the world’s second-largest economy.
NetJets Business Aviation Ltd. is the first global private aviation company to begin operating in China, the company said in a statement today after announcing it won a license from the Civil Aviation Administration of China.
Air travel demand in Asia is projected to expand 5.7 percent in the four years through 2017, with routes within or connected to China the largest driver, according to an International Air Transport Association study last year. Potential demand for private charters remains unclear as the government presses ahead with an anti-corruption campaign that’s hurt sales of high-end liquor and other luxury products.
The crackdown may have some impact at the beginning and won’t affect long-term demand as China’s market matures and the economy continues to grow, NetJets Business Aviation Vice Chairman Eric Wong said on a conference call.
The company is operating two planes out of a base in the southern city of Zhuhai, near Hong Kong and the gambling hub Macau, according to Wong. The private jets operator hasn’t decided how quickly to add planes to its fleet, he said.
NetJets Business Aviation is a joint venture between the Columbus, Ohio-based NetJets, Hony Jinsi Investment Management (Beijing) Ltd. and Fung Investments.
To contact Bloomberg News staff for this story: Tian Chen in Beijing at tchen259@bloomberg.net. To contact the editors responsible for this story: Nicholas Wadhams at nwadhams@bloomberg.net.
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