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It's ironic that in a country where the fiery expansion of the aviation sector is led by a dramatic growth in the economy, business aviation is hit most as a result of infrastructure restraints.
The Business Aviation Association of India estimates that general aviation in that country is likely to grow by 30% to 40%. With more than 700,000 Indians accounting for a cumulative wealth of $3 billion, this comes as no surprise. Orders in 2006 saw the fleet double from 50 in 2005. Said BAAI president Karan Singh, "One business jet will be added every third day for the next two years, with the fleet tripling in two years." Deregulation, availability of finances, eased regulations for foreign investment in Indian companies, and paradoxically, the painful experience of travel on a commercial jet are driving this growth.
As major businesses and high-net-worth individuals line up to become aircraft owners, medium and some small companies are also looking to buy aircraft.
Presently some 300 applications for the importation of general aviation aircraft are pending with the government; 100 were cleared last year.
Lack of space at airports is becoming a major hurdle as commercial aviation expands. DKMA, in cooperation with Airports Council International, says that for the 15 airports in India that reported traffic figures to ACI, passengers increased from 43.5 million in 2005 to 59.2 million in 2006 - a 36% hike. The Asia Pacific region recorded a growth of around 10% to 11% for both domestic and international traffic.
Operators face constraints at every step, says Singh. Non-availability of general aviation terminals, poor facilities for ground handling, lack of hangar space and parking, and no heliports add to the woes of operators.
Indo Pacific Aviation COO Rohit Kapur explains that lack of MRO facilities for general aviation aircraft with only line maintenance available drives up the cost of maintenance, increasing downtime for aircraft, which results in revenue losses.
For all heavy maintenance, aircraft components have to go to Singapore, Dubai, Europe, or the U.S, depending on the type of aircraft and component.
However, Bombardier Chief Country Representative Srinivas Duvvuri is optimistic. "There is a quiet revolution going on. At the end of the day, economics will have to drive the industry. This is a temporary glitch, as once the infrastructure of the 30 non-metro airports comes up, space will be available to business jets."
Bombardier will not disclose how many private jets it has sold in India, but it opened a sales office in Mumbai last year and is waiting for approval to set up a service center. Competitor Dassault, which claims 80% market share in India for premium business jets, has Ratan Tata, chairman of the Tata Group, and Mukesh Ambani, head of Reliance Industries, among its customers.
Cessna and Raytheon say that an increasing number of queries are being converted into orders. "We'd sold five aircraft in eight years. But during 2005 and 2006, we sold 11 Citation jets," said Michael McGreevy, Cessna's regional sales director for India, Pakistan and West Asia. Raytheon sold nine aircraft last year.
With at least 250 to 300 general aviation aircraft and helicopters to be added in the next four years - provided infrastructure and airport space allow it and there are adequate pilots and engineers to operate them - the market for pre-owned aircraft is enormous. Lack of availability and a long waiting period for new aircraft have major manufacturers announcing up to two-year waits for orders on new aircraft. First-time buyers prefer to keep expenditures low, and since owners want to use their aircraft for charter, it makes commercial sense to buy pre-owned aircraft, Kapur says. "A pre-owned aircraft charter goes at almost the same price as a new one, but costs only half the price. Thus, bottom lines look better."
Club One Air, India's first fractional ownership company, has chosen the Cessna family of Citation Jets as the primary aircraft for its fractional program. Managing Director Manav Singh says, "This aircraft not only has performance under hot and humid conditions, but also has the best range, takeoff and landing capability, and comfort in its class."
India has a potential 2,000 fractional owners, according to Singh.
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