Growing Albeit Slowly

India’s business aviation industry will be three times larger by 2020, forecasts Business Aircraft Operators Association, and states that the association will take up policy and taxation issues with the concerned government agencies

In the US, business aviation provides employment to over 1.2 million people generating revenue of up to $150 million ( Rs. 750 crore) annually. But lack of policy for building aviation infrastructure, indiscriminate regulatory policies and high taxation are deterring the growth of the sector in India. The Business Aircraft Operators Association (BAOA) of India will soon submit a memorandum to the government to seek cuts in taxes and levies. However, the association still seems upbeat about the growth of the sector and forecasts that India’s business aviation industry will be three times larger by 2020.

“Arbitrary customs duty, high duties on aviation turbine fuel (ATF), sales tax, high charges for ground handling, are deterring the growth of the sector,” said Rohit Kapur, President, BAOA, while addressing a press meet at New Delhi recently. “Of and on we are having talks with the regulatory bodies,” he said and added, “the pace of growth in business aviation has outgrown the infrastructure available for the industry. We will be seeking support and cooperation from the regulatory bodies to develop adequate infrastructure and facilities for business aviation and help in policies, regulations and customs duty amongst other matters.”

An association of private and commercial aircraft operators, airframe and engine manufacturers, maintenance repair and overhaul (MRO) and other service providers, BAOA was formed in March 2011 with the vision to promote the growth of business aviation in India, define the standards and achieve the highest levels of safety, efficiency and reliability. “Considering the immense potential India has with more than 1,000 aircraft to be added over the next decade, there was an imperative need of a body that would aim to bring the fraternity into close cooperation for overall industry growth and mutual benefits. BAOA will act as a catalyst to unify the cornerstones of this growth and overcome the challenges the business aviation sector faces today,” said Kapur. “The business aviation industry is growing at an encouraging rate and India is all set to be the third largest aviation market by 2020.”

Comprising 39 business aircraft operators and representing about 65 per cent of India’s fleet in this sector, BAOA has also been accorded recognition by the International Business Aviation Council (IBAC), an umbrella organisation for all business aviation activities worldwide.

Highlighting its benefits, BAOA officials said that business aviation facilitates productivity and efficiency by saving time, enables access to areas with little or no airline services, reaches multiple destinations, serves industries like mining or oil and gas, and helps generate both revenue and employment in the economy. They opined that India is a hub for BPO and IT sector due to cheap labour and if proper support is provided, business aviation sector can also provide considerable employment potential. “Business aviation is all about efficiency,” said Kapur and added that besides enabling access to areas remotely connected, business aviation is a productivity tool as also a revenue and employment generator.

Apart from high taxation, BAOA officials also focused on the other challenges faced by business aviation operators arising out of lack of an aviation maintenance hub, inadequate infrastructure and absence of a clear policy framework. “There are no business aviation terminals like heliports, airfields, dedicated hangar and parking space. It is not only the lack of infrastructure that is bothering the operators; the government does not even have a policy for building aviation infrastructure,” said Kapur. “Further, because of the inordinate delay in obtaining landing permit from the regulatory bodies, users of business aircraft prefer to take scheduled flights instead.”