This article first appeared in The Edge Malaysia Weekly on September 30, 2024 - October 6, 2024

FRENCH aerospace company Dassault Aviation and VistaJet Group Holding Ltd — one of the world’s biggest private jet charter firms — continue to see growth in Malaysia’s business aviation subsector, against the backdrop of persistent supply chain problems that have plagued scheduled airline operations.

Dassault is betting on a rise in demand for civil aircraft, with the largest, longest-range of its Falcon family of business jets, the Falcon 10X, slated to enter into service in 2027. Malaysia is Dassault’s largest market for civil aircraft in Southeast Asia, having sold eight Falcon aircraft — a mix of Falcon 7X, Falcon 2000, Falcon 900 and one Falcon 8X — here.

“The Covid-19 pandemic has allowed many people to discover this business aviation activity. While some have stopped using [business jets after the pandemic], most have maintained them as they discovered the benefits, that is, you operate on your schedule, you have privacy and comfort, and from a safety standpoint, you bypass crowded terminals. [In addition,] you have access to an exclusive business aviation terminal, which takes only a few minutes to get to the aircraft,” Dassault Aviation Asia Pacific president for civil aircraft Jean-Michel Jacob tells The Edge in an interview.

He says even though airlines have resumed operations, demand for private jets is holding up.

“It doesn’t mean that they all buy; they can charter a jet. If private jet charters boom or grow, the whole [business aviation] industry benefits. [That’s because] once the use of business jets increases to a certain level, customers will decide to buy a business jet,” he says, adding that customers usually charter for 200 hours a year before they realise buying their own jet makes more financial sense.

Crystal Wong, executive vice-president of sales for Asia at VistaJet, which is majority-owned by Swiss businessman Thomas Flohr, concurs. “The pandemic acted as a kind of catalyst in helping us enhance the growth of private jet charters.”

She says even before the pandemic, Malaysia’s private jet charter services market had seen significant year-on-year (y-o-y) growth.

“Two years after the pandemic, we see continued double-digit growth. In the first half of the year, our corporate programme members in Southeast Asia grew over 10% y-o-y. When it comes to the number of flights in Southeast Asia, we saw an over 20% y-o-y increase in 1H2024,” she tells The Edge.

VistaJet is currently in a strong position in Malaysia, its second-biggest market in Asia after Greater China. Its clients include corporations and high-net-worth individuals (HNWIs).

“Even before Covid-19, VistaJet had invested in its presence in Malaysia, which is a key market for us. We saw the demand [coming] from Malaysia and Southeast Asia. We have been in Southeast Asia for 16 years, while our company is celebrating our 20th anniversary this year,” Wong says.

“Geographically, Malaysia is business aviation-friendly. It is a good place to connect to the rest of Southeast Asia. For example, typical routes for our clients would be Subang to Seletar (Singapore). If they have an office in Singapore but their home is in Kuala Lumpur, they can easily do a same-day run. They would spend double the time if they fly on commercial airlines,” she points out.

Unlike business jet owners, VistaJet offers charter jet services on a membership basis. Its members get access to its 360-strong fleet of privately owned jets that range from super-midsize or heavy jets such as the Bombardier Challenger 350 to ultra-long-range aircraft like the Bombardier Global 7500.

“Programme members can enjoy guaranteed availability of their chosen jet at just a day’s notice and they only pay for the hours they fly without the need to own an asset or pay monthly fixed costs to operate an aircraft. We take away all their asset risks.

“There are also more touch points when you fly a commercial plane. There are about 20 touch points when you fly with VistaJet as opposed to some 700 when you fly a commercial plane. So when it comes to hygiene and safety, it is a much better experience,” asserts Wong.

So far this year, VistaJet has seen exceptional growth in demand in Asia-Pacific, the Middle East and Africa.

“The demand from Asia is supported by fewer geopolitical issues, while there has been an increase in the number of HNWIs in the Middle East,” she says, adding that business aviation is also tied to the wealth in the region. “When it comes to Africa, there are not many reliable choices in the African continent. We are a global private aviation company. When the clients use us, they are not restricted to one region and they can connect to the world flying VistaJet,” Wong adds.

“If you look at Southeast Asia, the number of HNWIs and corporations is growing. Also, we are working out how to reach out to corporations here about the advantage of flying privately. Flying privately, for corporations, is not a luxury but can save them time — avoiding customs and immigration queues or inconsistent schedules by the commercial airlines. We have also been investing in innovations — different programmes to enhance customers’ experience such as customised wellness menus.”

Wong believes that the ongoing revitalisation of Sultan Abdul Aziz Shah Airport, or Subang Airport, will also enhance its customers’ experience. Since 2008, VistaJet has been operating its Asian hub out of Subang Airport.

“The set-up here in Subang has been friendly to us. We do not feel our operations have been affected by [the commencement of] jet operations. I think the decision to do further expansion of Subang is a good sign for our business and also [for the] commercial airline business.”

Wong points out that a key challenge faced by private jet operators such as VistaJet is the various laws and regulations when it comes to flying private. “In Asia, different airports have different requirements. When you compare Asia to the US, the US has fewer rules when it comes to flying private. So as an operator, it is easier to operate within the US. This would be the challenge.”

Dassault’s business did not escape the global supply chain issues unscathed. According to reports, the aircraft manufacturer delivered 26 Falcons last year, down from 32 in 2022. The shortfall was reflected in an almost 31% slump in revenue to €4.8 billion last year from €6.9 billion in 2022.

Dassault aims to increase delivery of its Falcon business jets to 35 this year, bringing the total closer to the pre-Covid-19 delivery tally of 40 units in 2019.

It is anticipating a warm reception in Asia for its new large-cabin Falcon 10X business jet, which has a range of 7,500 nautical miles (13,000km). “We now have an airplane in development that will soon be able to satisfy the needs of some customers who want to fly non-stop, for example, to North America or western Europe from Subang. It would be fitted with equipment that would make it the safest airplane in its category. We benefit from the technology of Dassault’s combat aircraft to provide even higher safety. While every [aircraft manufacturer] may satisfy their customers’ requirements, we provide much higher safety through our digital flight control system and a smart throttle, which has the ability to automatically help keep pilots out of loss-of-control trouble. We are constantly in search of new tools for better safety and comfort,” says Jacob.

On the increase in the number of aviation incidents being reported around the world, he maintains: “It doesn’t affect us. There are very few [fatal] accidents. Airplanes have never been so safe. [Our business jets] are even safer [with our expertise as a manufacturer of both military aircraft and business jets].

“You live in Papua New Guinea and you know what happens in Patagonia, thanks to the internet. So wherever you go, you hear about this and that. But safety is still very high. I am optimistic that in the coming years, we will do well in Asia.”

Dassault also has a strong presence in the country through wholly-owned subsidiary ExecuJet MRO Services Malaysia Sdn Bhd, which is the largest business aviation aircraft maintenance, repair and operations (MRO) company in Malaysia with its 149,500 sq ft facility at Subang Airport. The Malaysian unit is one of the 14 ExecuJet MRO facilities across five continents that were acquired by Dassault in 2019.

“To have ExecuJet MRO Services in Malaysia or Southeast Asia helps because people want to be sure that we will get the right support at any time. And this service centre is of extremely high quality — we have the right equipment and people,” emphasises Jacob.

He says Subang Airport was chosen as a regional base for ExecuJet MRO Services because of its central location in Southeast Asia. “You have people able to work in the aviation field; Malaysia is a good place for developing regional aviation activity.”

Jacob says China is Dassault’s largest market for business jets in Asia, followed by Japan and South Korea. “Malaysia is our biggest market in Southeast Asia, but our business aircraft fleet is growing in Singapore, Vietnam and Thailand.”

He believes that the commercial jet activity at Subang Airport will not grow to the extent that it affects the business jet operations. “The airport can certainly accommodate both activities. I am not worried. But I am happy that we have Subang Airport. It is a very convenient airport for our business jet activity.”

According to Malaysia Airports Holdings Bhd (KL:AIRPORT), Subang Airport recorded a significant 25% increase in international passenger traffic in August, following the resumption of jet operations at the airport. Currently,  five airlines — Firefly, Scoot, Transnusa, AirAsia and Batik Air — have commenced Airbus A320 and Boeing 737-800 flights out of Subang.

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