Part of the problem is that the mainland companies are expanding quickly and lack experience, says Jason Liao, chief executive of consultancy China Business Aviation Group. Liao also doubts that Deerjet would have had the management time for foreign expansion.
Hong Kong aviation consultant Jeffrey Lowe, with extensive experience in the local industry, agrees that a mainland management company would have great trouble in offering acceptable service internationally. He remembers once having to explain to a cabin attendant of a mainland operator that the client's meal should be presented attractively, not slopped onto the plate as it might be in a staff cafeteria. The cabin attendant was not lazy; she just did not know. No one had told her before.
Lowe sees another great advantage in HNA setting up the Hong Kong subsidiary: It can help resolve a remarkable clash between Chinese buyers' expectations and the regulator's rules. Chinese buyers of almost any general aviation aircraft, including business jets, tend to approach the transaction as they would when ordering a new car—they want it next week. And while the buyers are unusually anxious to hop in and fly, the Civil Aviation Administration of China is unusually slow in registering their aircraft. The process can take six to eight months, says Lowe.
This creates an opportunity in first registering an aircraft outside of mainland China and flying it from a Hong Kong site until its Chinese registration is ready. Lowe's former employer, Business Aviation Asia, does that, and Hongkong Jet offers that service, too. Buchholz says its customer base is split fairly evenly among Hong Kong, mainland China and Southeast Asia, where some of the aircraft are located.
Despite the awkwardness of flying in China with private aircraft that are not registered there, some mainland customers prefer to keep their aircraft in Hong Kong indefinitely. Operators of non-mainland aircraft normally need to file flight plans two working days before taking off in China—largely eliminating the flexibility that is one of the greatest advantages of a bizjet. And after seven internal flights, the aircraft must leave China. That may not be such a problem for clients who often need to fly abroad, however.