Deer Jet still flying high

Facing cutthroat competition, Deer Jet says its top service is something that cannot be compromised. CHINA DAILY

Deer Jet Co Ltd, China's largest business jet aircraft operator and a subsidiary of Hainan Airlines, is seeking to diversify its portfolio, improve efficiency and lower costs amid the industry downturn.

The government's campaign against official extravagance and the wasting of public money has hit the personal aviation industry, as demand from officials has fallen. Several major carriers in China have now dropped their first-class service.

Sean Xu, chairman of Deer Jet Co Ltd, admitted the campaign against extravagance was having an impact on the company's business, but said he was confident this was short-term and demand would pick up.

"The development of the industry is not entirely decided by the government. Demand from the private sector keeps growing. The reason for that is simple: business jets are a means of boosting efficiency, not a luxury. It exists because it creates value for society," Xu said.

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That was what Chen Feng, founder of Hainan Airlines, now one of China's largest carriers, found in the Unites States when he visited in 1994. He noticed there were companies that served only the business elite with small jets and pick-up and drop-off door-to-door services. He returned home, started to advocate the new concept and persuaded the government to approve the business. Hainan Airlines set up the business, which evolved into Deer Jet, which pioneered the industry in China.

The past two decades witnessed the rapid growth of this industry, as social wealth grew rapidly in China, and more players entered the market, increasing the competition in the sector. But Deer Jet still leads the industry. It has the largest fleet in the country. As of August 31, the company had 30 proprietary aircraft and 52 planes owned by individuals but operated by the company.

In the past 19 years, the company was the first to manage personal jets and the first to offer maintenance, repair and operating services.

The chief mission of Deer Jet remains the same: save the time for its clients, said Xu.

"The shared characteristic of our clients is: they are so busy that they don't have enough time. That's what we specialize in, to improve their working efficiency, giving them time," Xu said.

The cutthroat competition has driven Deer Jet to diversify its portfolio of products and services. To expand its client base, Deer Jet invented the joint-ownership model, in which individuals can buy a plane with a few other individuals.

"The large fleet Deer Jet owns means the service a consumer gets will not be compromised: until now only our company can guarantee that. We're contacting interested customers over the business," Xu said.

Despite the fast growth of business aviation, the industry still face the perennial bottlenecks that restrain its development, including the military's control of a large swath of the country's air space, the shortage of pilots, the insufficient supply of on-the-ground facilities and services, and the overly high tariff for imported aircraft.

So besides its traditional business areas, the company has also established a branch to assist its clients to sell their jets, while its helicopter branch is tapping the helicopter tourism industry. It is also developing a yacht business in Sanya, Hainan.

While Deer Jet is not immune to the problems facing the industry, Xu said the company will adapt to the changes in the industry, while achieving growth from "emerging technology, high efficiency and lower operational costs".

A sponsor and participant to the Summer Davos 2014 in Tianjin, the company is also seeking growth by expanding its foothold around the globe.

Xu said Deer Jet's Hong Kong business is growing fast, and it has long-term operation in Moscow, Dubai and Huston.