China’s Deer Jet is making a significant shift in its business plan though a new strategic partnership with Houston-headquartered Starbase Jet. It is taking seven aircraft (more than 10% of its current fleet) and moving them to the U.S., where they will be refurbished and offered for charter by Starbase Jet. Deer Jet vice president Zhang Peng describes the new venture as “a milestone in China’s business aviation development.”
The seven jets will be a mix of Gulfstream types (G200, GIV and G550), with the first example (a G200) already refurbished and in the United States. The other six are due to arrive over the next three months. Starbase Jet CEO Randall Reed says the dry-leased aircraft will all be placed on the U.S. register to operate worldwide under the Starbase Jet banner, on a revenue-sharing basis with Deer Jet. Starbase Jet already has a fleet of around 30 owned and managed aircraft, while Deer Jet has a total of 63 (30 owned, 33 managed).
The groundbreaking deal is helping Deer Jet manage some excess capacity and move it to a market that can absorb it, according to one company executive. It also allows Deer Jet to make space for newer aircraft in its Chinese operation. The agreement cuts support and maintenance costs for Deerjet but most importantly delivers an entirely new level of access to the U.S. market.
“Now our customers flying inside the U.S. will get a much higher quality service at a very competitive price,” says Deer Jet chairman Xu Xin. “The number of Chinese travelers in the U.S. is increasing year-on-year, and only a fraction of them are using business aviation. Deer Jet will make over 200 flights to the U.S. this year, but most Chinese businesspeople are arriving on commercial aircraft. Now we have an option for them to handle all of the travel inside the U.S. with Starbase Jet, which can be arranged through a partner with whom they are familiar and comfortable.”