Chinese consolidation
It’s no secret that making money in China is pretty tough going at the moment.
Since Chinese premier Xi Jinping introduced his anti-corruption and austerity measures, Chinese officials have shied away from chartering aircraft for their travels. Businesses have also stayed away in their droves, fearful of the anti-luxury backlash that’s been sweeping the country, worried about sending the wrong message if they do charter aircraft.
The result is that the bottom pretty much dropped out of the charter market and a high proportion of charter companies aren’t making money. China, it would appear, is in a bit of a mess right now.
The problem it seems, is that things are almost changing on a daily basis and people don’t really know what’s going to happen.
But if history has taught us anything, it’s that China is unpredictable. The country itself has adapted and changed with the times in order to survive. By adapting the basic communist principles China has been able to not only survive, but prosper in a way that’s unheard of in modern history.
And that’s exactly what’s happening with Chinese operators, they are adapting, changing in the current situation in order to survive.
Some will throw the towel in, others will consolidate. Corporate Jet Investor is aware of at least three operators that will disappear as they are merged or taken over, and that’s probably just the start.
It was easy to get caught up in the Chinese gold rush, we all got carried away, but China can be a cold, unforgiving place if you’re unprepared.
And as one Chinese operator told me this week: “When the tide goes out, you’ll see who’s been swimming naked.”
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