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Oct-12-2011:
Rising demand for air charter in India
Economic Times October 12, 2011,
 

Taking a chartered flight is no longer a luxury, but slowly emerging as a need for corporates, who are willing to shell out extra money to use their man hours to the maximum. Today, private jets have become a regular mode of transport for industry heads in India. Big industrialists with private jets include the Hinduja Brothers, GVK Reddy, Shishir Bajaj, Anil and Mukesh Ambani, Vijay Mallya, Rahul Bajaj, Sajjan Jindal and Ratan Tata, among others.

Market scenario and challenges
In the last few years, charter airlines have gained importance in the aviation sector, along with scheduled airlines. Indian airports witnessed 33.55 percent more general aviation flights during the last four years from 2006, according to research and consulting firm Frost & Sullivan.

Sanjay Saihgal – VP, Business Development, Deccan Charters Ltd, says, “Charter business has been growing steadily over the past few years. Businesses and HNIs have increasingly started realising the efficiency and other benefits of using air charter services. Charter is helping most customers to avoid long hours spent at the airports and also enables direct access to remoter locations.”

“At present, there are around 680 general aviation aircrafts, which are expected to reach 2,000 by 2020. Nearly US$12 bn is expected as investments in acquisitions in the next decade,” says Gautam Singhania – CMD, Raymond Ltd. The Indian charter fleet is dominated by Hawker Beechcraft with 35 aircrafts, Cessna Aircraft Company with 31 aircrafts and Bombardier with 24 aircrafts. These three companies together hold 66 percent of the market share, while the rest is shared between Dassault Falcon, Gulfstream, Embraer, Airbus and Boeing.

The increasing charter aviation movement in the country has encouraged airport authorities to construct additional facilities catering only to general aviation or non-schedule flights. However, these facilities lack various amenities to become a full-fledged Fixed Based Operator (FBO). At present, separate facilities for general aviation are available at Delhi and Mumbai airports. Such additional facilities for air charters at the governmentowned airports in cities such as Kolkata, Bhubaneswar and Trivandrum are in their planning stages.

Despite improving business scenario, the general aviation movement has witnessed around 12 percent decline in April-June period of 2011, as compared to the corresponding period in the previous year, reveals aircraft movement data available with the Airport Authority of India (AAI). Industry experts opine that several key challenges are preventing the sector from thriving in a booming economy. Charting out the challenges for the general aviation sector, Dhiraj Mathur – Executive Director and L e a d e r (Aerospace & Defence), Price w at e r h o u s e Coopers India says, “High taxes, limited infrastructure support in terms of hangar facilities and increased airport capacity, combined with frequent curfews in major cities that limit the availability of operating slots for chartered jets are some of the issues that the chartered/general aviation segment needs to cope with.” .

Absence of well-equipped FBOs is a key hurdle plaguing the industry. The government’s lethargic approach in setting up FBOs for promoting general avia-tion movements in the country has led to poor infrastructure. Maintenance of charter aircrafts outside India due to lack of infrastructure, spare parts and adequate MRO (Maintenance, Repair and Overhaul) facilities, combined with dominance of highly-paid foreign pilots add to the aircraft operating costs.

Besides, the government’s decision to charge 25 percent customs duty on the import of business aircraft has impacted the purchase decision of potential customers. Further, the involvement of too many agencies for licensing a charter aircraft such as the Ministry of Home Affairs, Ministry of Civil Aviation, Bureau of Civil Aviation Security, the AAI and others lengthens the time taken for these aircraft to be operational.

Trends and opportunities
Charter aircrafts in India are either owned or leased, with former being the most in demand. Buying an aircraft provides long-term benefits to companies. However, risks are equally involved in buying aircrafts. This has given rise to the concept of fractional ownership scheme, which is quite popular in developed nations. The fractional ownership model offers an individual or company the option to purchase a share of an aircraft, which can be as little as 1/16th of an aircraft, offering nearly 50 hours of flight time per year, to 1/2 of an aircraft depending on the needs of the operator. In addition, the management company provides all scheduling, flight planning, staffing, catering, maintenance, communications and insurance servi ces. “Although lucrative on paper, I believe that the fractional ownership model is difficult to sustain,” says Captain Karan Singh – CEO, Indo-Pacific Aviation Pvt. Ltd and MD, Business Aircraft Operators Association. Commenting on the new happenings in the segment, Clive Lewis – Vice President (Marketing), Swajas Air Charters says, “The recent transformation is that clients who used to charter aircraft and fly about 15–20 hours a month have decided to purchase their own aircraft. A few clients are going one step ahead by offering their aircraft on charter when it is not in use; the additional revenue earned will help cover operational overheads.”

The increasing scope of charter aviation provides opportunities for other industry players across the value chain, eventually acting as a catalyst in the national economic growth.

MRO service providers, FBOs, aircraft management, aircraft manufacturers and flight training schools are some of the industry players to benefit in the value chain over the foreseeable future.

Realising the local manufacturing potential, Mahindra Aerospace has already entered into manufacturing of small civilian aircraft for the general aviation market. These aicrafts are priced 20 percent lower than a Cessna aircraft. Many global firms including Hunt&Palmer PLC and Dubai-based Empire Aviation Group (EAG) have forayed into charter and aircraft management business in India.

Tremendous scope for growth also exists in charter airlines targeting pilgrimage, medical and adventure tourists. The concept of air ambulance is also emerging and has great long-term potential in the Indian market. This new air charter wing, which provides lifesaving services to patients and transports them from remote locations to cities, has witnessed a five-fold increase in demand over the last three years.

Road ahead

Growth in the general aviation market is expected to be around 12–15 percent in the coming years. Arjun Bafna – MD, Bafna Aviation Pvt. Ltd states, “The general aviation industry is expected to grow at a radical pace. There are ample opportunities opening up for everyone. The MRO space is almost untapped. With more than 1,500 aircrafts expected in the next decade, there is also a huge potential on the maintenance side.” Infrastructure development, flexibility in regulatory framework, government focus in structuring the air charter business, easing taxes/duties and construction of dedicated general aviation airports can take air charter operations in India to new highs.

   

Nov-22-2010:
Domestic air traffic grows
BS Reporter / Mumbai November 22, 2010, 15:16 IST
 

Air traffic continued on its growth path in October with the number of passengers carried by domestic airlines increasing by over seven lakh while Jet Airways and its no-frill subsidiary JetLite gained a market share of more than 26 per cent.

The total domestic passengers carried by the scheduled Indian airlines last month was 46.17 lakh, compared to 39.11 lakh in September, official air traffic figures released today said.

While Jet Airways and JetLite together carried 12.13 lakh, it was followed by Kingfisher-Kingfisher Red combine with 8.77 lakh and Air India (Domestic) with 8.16 lakh.

As in the past, no-frill carrier IndiGo flew 7.75 lakh passengers in October, Spice Jet carried 6.30 lakh and GoAir 3.06 lakh, the figures showed.

In the market share for October, Jet-JetLite combine bagged 26.2 per cent, Kingfisher 19 per cent, Air India (Domestic) 17.7, IndiGo 16.8, SpiceJet 13.6 and GoAir 6.6.

No-frill airlines IndiGo and Spicejet led the way in seat factor, or the average percentage of seats per aircraft filled during a flight, recording 86.1 per cent and 84.4 respectively while Air India (Domestic) was the lowest at 70.8 per cent, the figures showed.

   

Nov-16-2010:
Business air travel rebounded in Sept: IATA

Reuters / Geneva November 16, 2010, 16:06 IST
 

Business air travel rebounded further in September, rising 12.1 per cent from a year earlier, but remained below pre-recession levels, the International Air Transport Association (IATA) said. The latest figures were buoyed by premium traffic to and from Asia and the Middle East, while trans-Atlantic markets were relatively weak, IATA said on Tuesday.

"Business travel continues to be the key to overall international travel markets, with business confidence moving higher in major economies but consumer confidence weakening," IATA said in its monthly premium traffic monitor.

September's 12.1 per cent annual increase in travellers in first or business class, compared with a 6.2 per cent rise in August. Growth in premium travel continues to outstrip the increase in numbers at the back of the plane, with economy class seats rising 9.3 per cent in September. However, these are now above pre-recession levels.

IATA said the rate of year-on-year increase in premium travel will slow in coming months because of sharp gains a year ago, but the extent of the slowdown in the fourth quarter now looked less than feared.

   

Oct-26-2010:
Himachal to set up Rs 1k cr intl airport near Shimla

Press Trust of India / New Delhi October 26, 2010, 16:13 IST
 

In a bid to make the state a global tourist attraction, Himachal Pradesh government has said it will set up its first international airport near Shimla, with about Rs 1,000 crore investment, under public private partnership mode.

The state government has initiated a slew of steps to promote tourism to increase its contribution to GDP to 10 per cent from the present 8.5 per cent, Chief Minister Prem Kumar Dhumal said at an investment meet here last night.

The tourism sector contributes about Rs 3,600 crore to the Rs 44,000 crore state GDP.
      
Among the measures to promote tourism, the government has identified 40 acres each at three places in Shimla and Solan (near Shimla) districts to set up the Rs 1,000 crore international airport.
      
The final decision on the spot would be taken soon, Dhumal said.
      
Besides, the number of helipads in the state would be increased to 70 from the existing 60, he added. The government plans to set up these 10 helipads at Sirmour, Kinnaur and Mandi districts.
      
Dhumal said the government has identified three heli-taxi operators and is likely to sign pact with them within a month for connecting all district headquarters through these services.

   

Oct-19-2010:
UP to take call on commercial viability of international airport in Kushinagar

Virendra Singh Rawat / New Delhi/ Lucknow October 19, 2010, 0:43 IST
 

Uttar Pradesh government will soon take a call on the commercial viability of the proposed international airport in Kushinagar estimated to cost Rs 829 crore.

While, the state government had already acquired about 167 acres for the main airport, the rest of the land both for the airport and the commercial enclave are yet to be acquired. The state government had notified 13 villages for the acquisition of roughly 640 acres.

Four infrastructure companies — GMR, GVK, L&T and Gammon India — are in fray after qualifying the Request for Qualification (RfQ) stage.

The project, which had already been given in-principle approval and environment clearance by the Centre, has also received the Central No Objection Certificate (NoC) recently.

“Now, that the project has been cleared, the state infrastructure and industrial development commissioner (IIDC) will convene a meeting next month to discuss the commercial viability and funding issues related to it,” UP tourism secretary and State Tourism Development Corporation managing director Avnish Awasthi told Business Standard.

However, he said that any airport functioned with the coordination of the Airports Authority of India (AAI), Directorate General of Civil Aviation (DGCA), Indian Air Force (IAF) and the Customs department. The necessary coordination with these agencies will also be followed up, he said.

The project seeks to boost Buddhist Circuit tourism in the eastern parts of UP.

The state government already owned 100 acres of land in the form of an old airstrip built in 1946 for emergency services. The proposed airport will have a 3,200 metre long airstrip.

Awasthi said all the issues pertaining to land acquisition had been resolved to the satisfaction of the land owners and farmers.

“The government has paid nearly Rs 140 crore to land owners as compensation. The land owners, who do not live in the notified villages are the only ones left out now,” he said.

The airport will connect Buddhist Circuit directly with countries accounting for maximum backpackers, including Japan, Myanmar, Korea, China, Thailand, Bhutan and Sri Lanka.

   

Oct-1-2010:
India will need 1,000 aircraft over 20 yrs: Airbus CEO

Reuters / Bangalore October 1, 2010, 13:02 IST
 

EADS' unit Airbus expects the Indian aviation market will require more than 1,000 aircraft in the next 20 years, its chief executive Tom Enders said on Friday.

US rival Boeing, which sees India's expanding aviation sector needing 1,150 commercial jets valued at $130 billion over 20 years, is set to tie up a $5.8-billion defence deal with India, ahead of President Barack Obama's November visit to the country.

A burgeoning middle class that is pushing up demand for air travel, rising new entrants in the country's airline sector and India's plan to overhaul its defence systems make India an attractive market for the likes of Airbus and Boeing.

   

Aug-18-2010:
Air traffic in India continues upward trend

Press Trust of India / New Delhi August 18, 2010, 20:25 IST
 

For the seventh month in a row, air traffic in India continued its upward growth trajectory with domestic airlines carrying almost 500,000 more passengers in July compared to the same month last year.

The latest data collated by the Directorate General of Civil Aviation (DGCA) shows that during January-July this year, the airlines flew 175.61 lakh passengers as against 145.35 lakh flown during the same period last year, recording a growth of 17 per cent.

Leading the traffic figures were Jet Airways and its low cost subsidiary JetLite, which together flew almost 11 lakh passengers. Following them was Kingfisher and its subsidiary Kingfisher Red at 8.15 lakh, Air India (Domestic) 7.08 lakh.

Closely following them was no-frill carrier IndiGo which carried 6.91 lakh passengers, SpiceJet with 5.4 lakh and GoAir 2.28 lakh.

But on a stand alone basis, July this year has seen eight domestic airlines carrying the least number of passengers in the last four months. The fall in passenger flow was mainly because of the holiday season coming to an end.

The official figures also showed that there were 1,277 passenger related complaints in July, primarily relating to lost baggage, staff misbehaviour and refund of tickets.

   

Jun-07-2010:
Students smile as demand for domestic pilots rises

Sneha Kupekar / Mumbai June 07, 2010, 0:57 IST
 

Airline operators are making a beeline for Indian aviation academies. This follows the Directorate General of Civil Aviation (DGCA’s) programme to phase out expatriate pilots working with Indian airline operators, giving rise to the demand for domestic pilots.

The stagnation of the Indian airline industry in 2004-05 had prompted the need for foreign pilots. Expat pilots, estimated to comprise around 10 per cent of the estimated total 4,800 pilots in the country, are currently employed by major Indian scheduled operators such as Air India, Jet Airways, Kingfisher Airlines and SpiceJet.

“The DGCA tightening its restrictions on the renewal of expat pilots’ licenses, has definitely helped students find placements with Indian airline operators, who were earlier looking outside for their pilot requirements. We recently had a major regional airline recruit from us because of DGCAs new norms and we expect that the market will only continue to improve,” says Raminder Mamick Ghosh, Head -Business Planning & Control, Chimes Group, which runs the Chimes Aviation Academy. In particular, choppers, public sector pilots and private jets are expected to see a rise in demand.

The starting salary of students placed with this domestic carrier averaged Rs 1.25 lakh per month, according to Ghosh. The fees involved for training as a commercial pilot are also high. “The average fees for an 18 month course is Rs 20-25 lakhs, so its pretty steep,” says a former aviation student who did not wish to be named.

Many trained pilots, meanwhile, who had been unable to find employment with Indian operators are also hopeful of getting a job. “A few years ago, only the Indira Gandhi Rashtriya Uran Akademi had the infrastructure to provide decent training, the rest were just flying clubs. I had gone to California for my training three years ago, because the training period was lesser and the infrastructure was better. But, I was unable to find a job when I came back. Now, prospects are opening up again,” said a former student, who has been unable to find employment in India and is currently working in the hospitality industry.

   

   
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