Is Anybody Listening?

The need of the hour is to develop infrastructure, review policies and regulations at faster pace to meet the requirements of the developing general aviation, and to adapt and practise the highly successful business models available globally

General aviation provides great benefits to its users and the economy significantly by increasing efficiency and productivity of businesses through minimised travel time. It provides transportation for medical emergencies as well as services for public health, safety and disaster management. General aviation has also contributed substantially to providing transportation links to the offshore oil exploration sites, isolated communities and remote areas that are not served by commercial airlines.

Current Scenario in India

In India, general aviation has registered significant growth in recent years. As per the Planning Commission report for the formulation of the Twelfth Five Year Plan (2012-17) for the civil aviation sector, non-scheduled operators have grown in number from 36 in the year 2000 to over 200 in 2011. As per the Directorate General of Civil Aviation (DGCA), the general aviation fleet comprises nearly 800 small aircraft and 300 helicopters. Around 20 per cent of this fleet is over 25 years of age and may not be operational for long. As per industry sources, revenue from the general aviation industry is expected to record an impressive growth rate of 15 per cent rising to over Rs. 1,100 crore by the end of the Twelfth Five Year Plan.

Business aviation is an integral part of general aviation. With a booming economy and flourishing private industry, private jets are now much in demand to transport industry heads. In order to save time on travel of their executives, companies are moving towards acquiring their own jets. From 55 in 2007, the fleet size of private and business jets has grown to around 160 in 2013. Today, of the total general aviation flight hours in India, the contribution of business aviation is the highest. In spite of having the largest number of business jets in Asia a few years ago, India today has the second largest fleet after China which has around 250 business jets.

In India, the demand for business jets is on the rise. Also the there is an increase in the huge demand for helicopters for public services and tourism. Pawan Hans Limited (PHL), a leading helicopter company, has about 50 helicopters currently and is planning to increase the fleet to 500 in the next few years. Today, privately-owned aircraft are no longer viewed as a luxury but as an important tool for enhancing productivity and efficiency. Tourism has proved to be a catalyst for the demand growth in the helicopter market and the Ministry of Civil Aviation is planning to make the ‘Dial-a-Chopper’ service a reality by 2020. These are positive signs for the general aviation industry that is expected to grow at 10 per cent annually.

Growth Drivers

Corporate travel, tourism, mining and offshore operations, air ambulance and homeland security are the key growth drivers for general aviation. Productivity, customised travel plans and concerns about safety, security and flight delays render business aviation a preferred option to commercial air travel. The maximum utilisation of general aviation is in corporate charters followed by offshore helicopter operations. However, the benefits of general aviation aircraft with their accessibility to remote areas or those not covered by scheduled airlines along with their easy access to small airstrips and helipads are making them popular among corporate travellers.

A Bombardier study reveals that the use of a business jet saves around 20 per cent of management time compared to the use of scheduled airline services. It is evident that personal and corporate security will remain areas of concern for companies. Large business entities prefer business jets to obviate the risk of corporate espionage and security threats as these jets offer security and privacy to corporate travellers. Owning a private jet has become a status symbol as well. This factor i.e. ‘peer pressure’ could be considered a demand driver since many big market players are acquiring jets for their personal, recreational and business use. In India, the number of personal and business jets is expected to touch 2,000 soon.

Dial-a-Chopper

The market for helicopter operations in India appears to be equally promising. To realise its aspirations of ‘Dial-a-Chopper’ services, the government has planned the construction of helipads every 100 km on the national highways. Helicopter emergency medical services (HEMS) and other emerging areas of operations by rotorcraft such as in tourism, filmmaking, aerial photography and marriages could be the potential areas for helicopter service providers in India besides the election campaigns. As helicopters can be used in more than 30 different kinds of operations and in the near future, helicopters will be taking the lead in the general aviation sector in congested regions where airports are too busy to handle business jets. Recently, a company has made a deal for seven helicopters from Eurocopter to commence HEMS in India. According to PHL, 100 helicopters are immediately required for medical emergency services, another 100 for law and order services and 80 for disaster management. Keeping in view the repeatedly occurring natural disaster in Uttrakhand, the government there has planned to invest in development of 40 helipads/heliports to provide support in case of emergency. Mahindra Aerospace is planning to manufacture small general aviation aircraft in India and is in the process of setting up the plant in Bengaluru with an investment of $14.4 billion ( Rs. 86,400 crore). Industry sources indicate that 300 business jets, 300 small aircraft and 250 helicopters will be added to the current general aviation fleet in India during the Twelfth Five Year Plan period with an investment of more than Rs. 20,000 crore.

Seaplane operations in India are almost negligible. The large coastline of about 7,000 km and large water bodies inside the country can be utilised for operations hence minimising the operational cost with minimum infrastructure required. The Government of Kerala has begun taking initiatives for seaplane operations on a large scale for travel and tourism. With the increasing scope of general aviation in India, there are plenty of opportunities for other industry players too.

A Complex Business

Major factors such as lack of infrastructure, high tax structure, lack of dedicated policy framework and shortage of trained manpower compound the problem for general aviation growth in India. At present the most pressing requirements are the development of supporting infrastructure i.e. airport/airstrips and heliports as also regulatory framework and development of maintenance, repair and overhaul (MRO) industry dedicated to general aviation.

The lack of proper infrastructure and highly controlled access to airspace and landing permits can decelerate the growth of business aviation in India. There is a need to increase the number of fixed base operators (FBOs) and facilities for private jets. Airports tend to prevent private jets from landing at peak times, and without FBOs, business jet passengers are processed through the same terminal facilities as all other passengers resulting in overcrowding at airports and it is also a time consuming exercise for the most time sensitive air travellers. The government needs to allow secondary airports in cities for general aviation. The Begumpet airport at Hyderabad and Safdarjang airport in Delhi are ideal examples. But the policy framework does not allow it. By 2020, the cities of Delhi, Mumbai, Pune, Hyderabad, Bengaluru and Goa will all need alternative airports to handle general aviation traffic. In the United States, there are about 5,000 airports available exclusively for general aviation. In India, there are only 454 airports in all, of which only about 150 are in operation with limited access to general aviation.

No country in the world except India levies customs duties on purchase of aircraft for private use. The high customs duty of 18.5 per cent on corporate jets bought for private use deters potential buyers. It is just 2.5 per cent for non-scheduled operators and nil for scheduled operators and aircraft imported for government use.

The DGCA does not allow the pilots to cross over from one Indian-registered aircraft to another. It is easier to replace the pilot if the aircraft is registered abroad. Clearance for heavy maintenance and pilot training also prove to be impediments. All of these factors seem to bolster the general belief among India’s private and corporate owners that resale values of foreign-owned aircraft will hold up better than those for aircraft registered at home.

In order to get a flight plan approved, the application needs to be made seven days in advance whereas in developed countries it is 24 hours or less. Facilities for online application, approval of flight plan and payment are restricted in India. Online flight plan facility is available at select airports only but an online payment option is currently not available.

The industry’s growth continues to be stunted by inadequate infrastructure and regulatory barriers as well as by lack of a policy framework that applies to it. Many orgnisations in general aviation are trying to change the government’s attitude but the general aviation and business aviation sector rarely receive only a passing mention in the civil aviation policies. In India, the general aviation sector has, so far, been the most neglected sector in the civil aviation industry due to increasing government focus towards commercial aviation. There are no separate guidelines for business aviation and no concept of FBOs or separate general aviation terminals. In recent times we could notice many supporting moves by DGCA. The entry barrier is removed for foreign Bizav crews by the efforts of DGCA. Also special attention is given to helicopter operations under the recently published CAR Ops 3 (draft). Also the aircraft acquisition process is now simplified by MoCA. We hope more such supporting moves will keep rolling out.

Good Returns on Investment

To derive the full benefits of general aviation, India should introduce a streamlined permit system to reduce formalities for landing and over flight approvals, reduce processing time for customs and immigration procedures and introduce a business-friendly financial and regulatory environment for procurement and operation of business aircraft. This will eliminate the complexities involved in business aviation. The need of the hour is to develop infrastructure, review policies and regulations at a faster pace to meet the requirements of the developing general aviation, and to adapt and practise the highly successful business models available globally. If regulatory authorities listen to the promising sound of general aviation business then they must look into the organisational structure tooversee the interests of general aviation operators.