The Asia market has been hyped to the skies for years now, but companies like Metrojet that base themselves wholly in the region, and who are in it for the long haul, have learned to keep their feet solidly on the ground.
It is hard work and attention to detail, along with the sharpest possible customer-centric service ethos, not miracles or windfalls, that build success in what is already a highly competitive market, and one that is not without its challenges. Business aviation in Asia in general and across China in particular, is still grappling with some crippling constraints in both infrastructure and skills.
“It is not that we are not growing. 2013 was a wonderful year for Metrojet, but then I am an eternal optimist and every year is a wonderful year for me,” says Metrojet CEO Björn Näf. The company, part of the Kadoorie group, enjoys solid support from the Kadoorie family and adopts the same 6-star service standard as its sister company, Peninsula Hotels. This is probably worth a note in its own right to make clear what Näf is talking about when he speaks of top quality customer service. The Peninsula Hotels group was founded in 1928 and operates prestige luxury properties in nine major cities, including the flagship Peninsula Hong Kong, plus Shanghai, Tokyo, Beijing, New York, Chicago, Beverley Hills, Bangkok and Manila, with a new Peninsula in Paris currently under construction.
Metrojet sends its cabin staff to the Peninsula training academy and has the former Director of Rooms at Peninsula, Andrew Chau developing the company’s customer services philosophy. “I know the general manager of the Peninsula Hong Kong very well, so we talk together and we work to achieve a proper cross-fertilisation of skills between our two operations. We use Peninsula in our promotional films and they use Metrojet. We look to finesse our joint service excellence on how we deal with high net worth customers in the charter and the aircraft management business,” Näf says. Metrojet currently operates in four locations, Hong Kong, Mainland China, the Philippines and India.
Early in 2013 Metrojet started a joint venture with Taj Air, part of the Tata Group, called TajAir Metrojet Aviation, in Mumbai, India. According to Näf, that venture has gone very well. “Going into a joint venture was an absolute blessing. India is a very complex country with many of the same infrastructure issues that China is grappling with as far as business jets are concerned. But it is a highly attractive market and one that is set to grow strongly over the next decade. For us to be effective in India and to leverage our expertise and our brand, we absolutely had to have a partner with a deep understanding of the very different culture and environment in India. From Taj Air’s point of view, they are delighted to be able to draw on the 16 years of experience in MRO that we bring to the table. We were the first company to start an MRO operation specifically for business aviation in Greater China and we enjoy the support of the major engine and aircraft manufacturers,” he comments. TajAir Metrojet Aviation is positioned as a boutique operator charging premium rates for a 6-star MRO service, which is entirely in keeping with Näf’s philosophy.
“Speaking not of India, but of the Asia market generally, it is full of mom-and-pop shops, small operations that think there is a fortune to be made from all the hype about the potential growth of business aviation in the region. Then they find that things are far more complex than they thought, that their overheads are higher and business is slower, and they either go under or go away,” he comments. There are no short cuts to building a solid, customer-centric operation that plans to be around for the long term. “You need to be looking six to seven years out all the time, but to be doing the right thing by your customers and your business from day one, every day. So that sets the bar high, which is great for us,” Näf notes.
The charter market in Asia is not without its difficulties, and charter represents no more than around 5% of Metrojet’s total turnover, but Näf thinks that it is a worthwhile arena to stick with. “Within five hours we have half the world’s population within reach. That is 3.5 billion people, by some counts. So within that, you will find a lot of people who are interested in charter. We see, for example, companies with a regional headquarters in Hong Kong. The group CEO turns up and the regional CEO wants to fly him/her around all the group companies and key customers in the region. That is an ideal charter mission and it is typical of what we get. Or you have high net worth individuals looking to travel for leisure across a number of destinations,” he comments. Metrojet’s charter fleet includes a GV, a 605 and a Cessna Sovereign. Again, pricing is premium rather than cut price. “We have internationally trained pilots and highly professional crew and support staff. There is plenty of cut price chartering but we offer a premium service at a premium price,” he observes.
That said, Näf believes that China is still many years away from a US style charter market. For a start, with all the available airports at major city airports there is tremendous competition from the first class service and first class airport lounges of the mainstream quality carriers like Cathay Pacific. They can’t compete with the complete privacy and control that private jet travel gives the customer, but they do overlap and charter operators in China do not have the options that come from the 5,000 or so business aviation airports the US can offer. Using private aviation to get close to the customer if the customer is not in a major metropolitan centre is still an issue.
Managed aircraft services are at the heart of Metrojet’s business model and the company now manages 34 aircraft. “We have a very good service model based around the asset management of the aircraft, which we liken to the private business banking approach,” he comments.