The Sky Above One Belt, One Road
General Aviation’s Critical Role in Regional Economic Integration and Development
Mr. William Schultz
SVP, Business Development, China
The Sky Above One Belt One Road was originally written in February 2016, it was a contribution to a service guide on ‘Going Global’ and ‘One Belt One Road’ from the China Investment Association’s Project Investment and Financing Committee. This paper was an effort by Textron Aviation in China to describe the value of general aviation to the grand strategic plan for regional integration and development under OBOR. Since then, a lot of progress has been made.
China’s 13th Five-Year Plan, launched at the end of 2015, prominently includes general aviation as a contributor to economic growth. The National Development and Reform Commission (NDRC) released a Notice on Promoting General Aviation Pilot Projects in November 2016, encouraging investment in general aviation, consolidating its role for transportation, tourism and sports, and expanding other general aviation applications.
And in May of this year, the Belt & Road Summit was hosted in Beijing, attended by heads of state, diplomats, dignitaries and business leaders. During the Summit, Textron Aviation had the honor to participate in a forum about general aviation and the Belt & Road hosted by AVIC.
It is clear that confidence and understanding in general aviation’s contribution to economic growth is steadily growing in China and across the Asia region. Textron Aviation looks forward to continuing to be a partner of choice, supporting government and businesses to connect people and opportunities with our aircraft, expertise and reliable service.
The Sky Above One Belt, One Road
General Aviation’s Critical Role in Regional Economic Integration and Development
by William Schultz
General Aviation and the OBOR
The introduction of the ‘One Belt, One Road’ (OBOR) strategic plan is a multinational transportation development initiative designed to further integrate the economies of 60 nations across the Eurasian continent. The thinking behind the plan is that increased and modern transportation links between and among these diverse economies will promote the building of infrastructure and development of natural resources. Not to mention, the financial and industrial cooperation needed to achieve more trade and inclusive growth across a vast swath of the global economy.
While rail and maritime communications are often cited as the key connectors of OBOR, general aviation (i.e. civil aviation other than commercial airlines) is largely overlooked as one of the most rapid economical ways to create and foster this connectivity among people, business, and economies. The OBOR stretches across some of world’s highest mountain ranges and largest deserts, as well as through magnificent rainforests and innumerous islands in the area’s oceans and seas. For the last century, and particularly in the decades following the Second World War, air transportation of people and cargo over challenging terrain has been a precursor of economic development, especially in remote areas.
While general aviation is often dismissed as little more than the province of hobbyists and millionaires, it has proven its value in both developed and developing economies. In Textron Aviation’s home market, the United States, general aviation contributes to more than $200 billion per annum to the US economy; nearly $350 on average per capita. Some of the highest GDP per capita impact by general aviation is among sparsely populated states with limited transportation options because of size and terrain. For example, Alaska, Arizona and North Dakota, three of America’s most expansive and challenging geographies and those physically most similar to the OBOR territories, have approximately $915, $578 and $547 GDP per capita impact respectively according to a recent study.
The African continent, where road and rail links are comparatively underdeveloped, is another useful example. General aviation provides an essential lifeline, as well as the bare threads of connectivity holding entire economies together.
As with countries as varied as Canada and Kenya, across the OBOR, general aviation can play a major role in the transport of business people and cargo, as well as the growth of people-to-people contact and the development of local economies through tourism.
Business travellers around the world know the challenges of flying commercial airlines and the benefits of general aviation. Corporate executives and global entrepreneurs know that the value of private jets and turboprop airplanes goes far beyond comfort and convenience. Significant advances and growth in commercial aviation has been accompanied by tighter and tighter channeling of commercial air service, leaving significant numbers of airports either underserved or unnerved by commercial service. Private jets and turboprops fill a large and critical gap, enabling the rapid movement of key technical and management personnel to wherever they are needed. Often overlooked, however, is the entrepreneur factor: when a remote area becomes accessible to business leaders, its economic prospects rise because it becomes accessible to those who can actually bring commerce and capital to those regions.
Supporting the infrastructure that supports corporations and entrepreneurs accelerates business. According to industry analysts there are 466 business jets in Greater China by the end of 2016. The number is expected to grow. Private jet ownership in China is forecasted to increase sevenfold from 2012 to 2032, and the market is expected to account for nearly 10 percent of the worldwide business jet in 2032. In response to growing demand, Textron Aviation launched the Citation Latitude business jet in 2015. The Citation Latitude represents the perfect balance of comfort and efficiency and is the first business jet to combine a roomy, flat floor, stand-up cabin, with a midsize price and best-in-class operating costs. The Latitude was the best selling midsize jet worldwide in 2016.
As Chinese and regional business leaders discover the value of private business travel, the skies from Kunming to Yangon, Urumqi to Astana, and Shanghai to Moscow will be filled with the jets of powerbrokers and dealmakers building the OBOR.
Flying Cargo Caravans
After the deals are made, the supplies and products will start flowing across the OBOR. Very often this will include items traveling to and from remote destinations and large commercial freight transport will not always be an option. This is when the packhorses of general aviation come into play. Small, durable aircraft can reach remote areas with unfinished airstrips, or even no airstrips at all, if they land on water.
These small cargo aircrafts are essential for connecting to main air cargo centers and facilitate the rapid transportation of mission critical items such as food, documents, pharmaceuticals and medical equipment, and valuable electronic components. For example, ideal for cargo missions, Textron Aviation’s versatile Cessna Grand Caravan is outfitted with an interior that can accommodate both passengers or be further customized for cargo space. Currently, FedEx utilizes a fleet of the Cessna Grand Caravan for pick-up and deliveries.
And, these aircraft do not only supply the necessities, but the creature comforts as well. Given the explosion of e-commerce and the rise of middle-class consumers across developing markets, general aviation will respond to people’s expectations for rapid delivery of online purchases.
Tourism is another important sector along the OBOR that will benefit with the growth of the general aviation industry and in turn will have a positive economic impact, especially in some of the region’s least developed areas. Over 120 million Chinese travelled outside the country last year, and they are continually looking for new options.
Most travellers fly commercially to their vacation destination, except for maybe the last 100 kilometers or less, where the truly beautiful destinations and extraordinary experiences lie waiting. Whether using a floatplane for island hopping in the Maldives and flying to scenic fishing and hunting locations in the Canadian wilderness, or viewing the Grand Canyon or the wildlife of the Serengeti Plain in a helicopter, there is no denying the incredible contribution of small aircraft to sightseeing and tourism. By bringing more people to more far-off and far-flung destinations remote communities, specialized aircrafts will be able to provide local color and amazing travel options to global tourists.
In addition, many travellers yearn to go ‘off the beaten path’, but when those travel options eat up precious vacation days those destinations are unrealized opportunities. To do so, the Textron Aviation available fleet offers the ultimate in outdoor exploration with the Caravan amphibian, adapted with Terrain Awareness and Warning System (TAWS) to increase safety precautions when flying over rough terrain or obstacles. In the near future, with the introduction of more local airports and aircraft, what was once a half a day on a bus can become a 30-minute flight and a life-long memory for a traveller, as well as additional income to local inns, restaurants and shops at the destination.
How We’ll Get There
It is forecasted that by 2025, emerging markets will capture just over half of world GDP, and China will become the largest economy in the world. General aviation is a critical part of this growth. The Civil Aviation Authority of China (CAAC) projects that in 20 years, the Chinese market will reach the same status as the United States and recently outlined plans to build 1,600 new general aviation airports across the country. More than 100 general aviation industrial parks are under construction or will soon begin construction across the country. It is estimated that 280 billion Yuan ($US45 billion) would be generated if all 2,800 Chinese counties had a general aviation aerodrome.
The addition of more aircraft, airports, and pilots will exponentially create economic opportunity domestically across China but also among neighboring nations. The nations and communities along the OBOR will potentially gain the most as the general aviation industry combines with rail and maritime infrastructure development to connect people, businesses, and industry across China and the Eurasian continent.
About Textron Aviation Inc.
Textron Aviation Inc. is the leading general aviation authority and home to the Beechcraft, Cessna and Hawker brands, which account for more than half of all general aviation aircraft flying. For more than 90 years, the Textron Aviation brands have represented unrivaled innovation, performance and leadership in the industry, offering an unmatched value proposition rooted in the total ownership experience. Leveraging unparalleled speed-to-market, Textron Aviation provides the most versatile and comprehensive business and general aviation product portfolio in the world through five principal lines of business: business jets, general aviation and special mission turboprop aircraft, high performance piston aircraft, military trainer and defense aircraft and a complete global customer service organization. Textron Aviation has delivered more than 250,000 aircraft in over 143 countries. Its broad range of products include such best-selling aircraft as Citation business jets, King Air and Caravan turboprops and T-6 military trainer aircraft, all of which are backed by the industry’s most capable global service network. For more information, visit txtav.com.