Understanding the growth of business and private aviation in Southeast Asia
When the topic of business and private jets come to mind, it’s easy to think of private flights across Europe and North America, two regions that have long been home to many private jet companies.
In this article, we’ll be focusing on an area that has a growing customer base for business aviation: Southeast Asia.
To better understand the growth of private and business aviation in Southeast Asia, we must first look at the economic factors behind it. Southeast Asia has come a long way from being the centre of the spice trade in the 17th century.
image source: New Africa / Shutterstock.com
The region has had a colorful history since then, but it was industrialization in the 1960s that started to really change things. Though it initially created a wide disparity between rich and poor, it steadily increased GDP per capita in Southeast Asia, starting in 1970 and continuing to the present day. The direct result of this was the rise of the middle class in Southeast Asia.
From the early 2000s, the rise of Southeast Asia’s low cost carriers has been obvious. And though we are talking about business and private aviation in this article, the rise of budget carriers in the region is a clear indication that the demand for travel is rising.
A study by Business Sweden shows that, by 2022, the middle class population in Southeast Asia is projected to reach 350 million, almost double since 2012. Due to this, Swedish retail products and companies like H&M and IKEA have targeted the region’s consumer market.
Image source: Business Sweden
And it’s not just the Swedish brands that are taking notice of Southeast Asia. Due to the region’s young population being so digital savvy, Southeast Asia has also become attractive to American and Chinese technology firms.
Yugo private aviation
So, long story short: businesses are booming in Southeast Asia and international markets are investing in the region. This development certainly hasn’t gone unnoticed, including by Singapore-based private aviation company Yugo which saw the need to supply Southeast Asia with private and chartered flights.
Jim Baldy, CEO and co-founder of Yugo / image source: Yugo
AeroTime talked to Jim Baldy, co-founder and CEO of Yugo, about where business and private aviation is headed in Southeast Asia.
Private aviation during the pandemic
Due to the limitations and complications that the pandemic brought to commercial travel, private jet transport has seen a marked increase since the middle of 2020.
The biggest reason for this is passengers’ growing concern about healthcare and hygiene. American management consulting firm McKinsey & Company revealed that, on commercial flights, an average passenger will come into contact with other people and objects an average of 700 times. On private flights, the touchpoints number about 20.
Baldy says: “We have witnessed an increase in demand for private jet flights and for private mobility in Southeast Asia during the pandemic.
“There has been a significant and continuing soar in demand for private travel. Additionally, we noticed that the number of first-time private jet travellers looking for private aircraft as an alternative solution to commercial aircrafts has been rising steadily as well.”
Baldy adds that, based on Yugo’s customer feedback, people choose private charters because the pandemic made flying complicated and difficult while private flights are deemed to be convenient and safe.
Business and leisure in Southeast Asia
”Southeast Asia is a diverse and intriguing region, with one of the world's fastest growing economies. As there is a growth of private consumption in this region, it is no doubt a good strategic location for private and business aviation,” Baldy says when asked about the decision to establish Yugo in the region.
image source: Yugo
“More and more business people are flowing in and there’s a surge of foreign investments, especially in Singapore, Thailand, Cambodia and Malaysia, so private charters are in great demand more than ever for investors and business people.”
Aside from its growing economy, the lure of Southeast Asia is the appeal of its many tropical islands which make great holiday destinations.
“With tropical weather and countless exotic islands in Southeast Asia, numerous tourists also like to fly to exclusive islands to experience the tropical paradise. It is important to build connections and create marketplaces to meet the demands and interests,” Baldy says.
Growing digital market
Southeast Asia’s digital consumer population is expected to reach around 380 million by the year 2026 according to a study made by Facebook and consulting firm Bain and Co. Taking advantage of this, Yugo has successfully raised USD 300,000 in its pre-seed round funding to further develop its mobile and online applications.
“Since the start of our platform beta testing earlier this year, we have successfully arranged flights from and to Hong Kong, Cambodia, Philippines, Indonesia, Singapore, Taiwan or Thailand and we aim to actively contribute to the reopening of borders in most of the Asian countries to tourism and business.”
image source: Yugo
The preferred method of payment in Southeast Asia is also rapidly transitioning from cash to digital-based transactions, leapfrogging credit and debit card payments still popular in developed nations.
Yugo is endeavouring to increase connectivity, safety and privacy of passengers in Southeast Asia and Asia Pacific.
“We are building the infrastructure for the future of air mobility. The eVTOL (Electric Vertical Take-Off), also called ‘flying taxis’, will be coming in the next five years and countries in Southeast Asia like the Philippines, Malaysia, Indonesia, Cambodia or Myanmar need to be prepared.”
Yugo’s variety of services include private charter, helicopter transfers, concierge, air ambulance, and air cargo.
Among these services, some that surged in popularity more than others during the pandemic.
“Private charter, air ambulance and air cargo had to be our most requested services last year.
Notably, air ambulance was the second most popular request, mostly flying to Thailand, Singapore and Germany,” Baldy says.
“Meanwhile, air cargo usually travels from Asia-Pacific countries such as China and Hong Kong to Southeast Asian countries like Cambodia, Thailand and Singapore. Our customers claimed that flying privately is the only way to go, for the sake of safety and convenience.”
Key differences between Southeast Asian country markets
Southeast Asia is made up of 11 countries, varied cultures and different economic drivers.
Baldy offers a glimpse of the key differences between Yugo’s Southeast Asian markets.
“Although we promote our services equally, we receive the most inquiries from the Philippines and Cambodia. We noticed that Cambodia's most requested service is air ambulance and private charter, flying to Thailand, Singapore, Hong Kong and China. When it comes to the private charter, it’s mostly Chinese nationals flying in and out for business and investment.
image source: Alessio Biribicchi Photography / Shutterstock.com
“On the other hand, the Philippines [a country composed of more than 7,000 islands] inquires for private flight and helicopter transfer the most, and preferably flying domestically to various destinations. The most notable destinations being Amanpulo, Boracay and Balesin.”
Baldy also says that air cargo flights are highly requested in Singapore.
The return of commercial flights
As countries are slowly opening back up, travel restrictions are easing and commercial flights are making a comeback, AeroTime asked Baldy how he thinks this will affect Yugo and the private/ business aviation sector?
“We see it as a green light that will allow us to grow our business, and we are preparing by enhancing our services and team as well.”
He adds: “Yugo already has been preparing for multiple flights to take off to Thailand since Thailand is now allowing fully vaccinated tourists, and does not require quarantine from November. Flights within Europe were already made as well and this has shown the industry will only continue to grow.
“We firmly believe that as countries are opening up for everyone, the demand will only continue to rise further as after the lockdowns and restrictions, traveling will be on everyone’s mind.”
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