Report Says China Cutting Bizjet Fees

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An investment analyst claims China has drastically cut taxes and fees for business aircraft but others say they'd like to hear that from the Chinese before they start ramping up production for the long-anticipated market. The New York Times is reporting that Morgan Stanley aerospace industry analyst Heidi Wood is claiming that Chinese authorities have made a series of moves to open up business aviation in the country. In her report, Wood says a $4,400 fee for each flight plan has been eliminated and a combined total of 23 percent in taxes and import duties has been reduced to a single tax of six percent on business aircraft effective in January. "This change was just announced in September, but made so quietly that true results have yet to be seen," Wood said in the report. "And yet the Chinese market has already begun to respond. Shortly after this announcement five new Gulfstream G650/G550s were ordered by Chinese customers." Business jet manufacturers say Wood's report is premature, but she's standing behind it.

"There are numerous issues and hurdles beyond regulatory, including the need to build infrastructure," she told the Times. "However, as we've been best able to assess, the changes have been approved and the resulting changes can now get under way." Jason Liao, Bombardier's sales rep in Asia and vice chairman of the Asian Business Aviation Association said tax reductions have been recommended by the Civil Aviation Administration of China but the central government has not approved them yet, according to Chinese officials he's spoken with. Cessna's Doug Oliver was also skeptical. "We are hearing rumblings of changes," he told the Times, "but we're not aware of anything concrete just yet."