2 JULY2008
With more than a 100,000 Indians whocan afford to own a business jet andmore than a 1,000 Indians coming up
every month day asking questions on what abusiness jet can do for them, private air chartercompanies are making a killing.
For most aircraft manufacturers globally, aircharter companies are the first introductionthat most potential clients have to owning theirown business jet. So for obvious reasons, a char-ter company is always at the top of any aircraftmanufacturers list of people to hard sell theirwares.
At present there are around a handful ofcharter companies in India, each one followinga separate business model of their own.
Manav Singh promoted Club One Air is justone of these. The company follows an interest-ing fractional ownership model for corporate &high net worth individuals.
The huge potential for business and privatejets has led to a he surge in charter operators aswell. At last count there were around 30 opera-tors including Club One Air and Ran Air.And theinternational majors are also coming - be it Bri-ley group promoted Bjets or Warren Buffet pro-moted Netjets. Even Europe based Execujetsand Vistajets are all set to offer their services onthe subcontinent.
Netjets has tied up with Ashish Chordia pro-moted Shreyans that deals in super luxury goodslike Porshe and Fendi in the country.
Bjets is expected to launch its services withinthe third quarter of 2008 and will have 15 air-craft within the first 12 months of operations.Thecompany recently announced that it had ordered10 Hawker 4000 business jets with options for anadditional five for an estimated $330 million.
At the Singapore airshow in February 2008,Bjets announced that it would launch servicesin India after announcing a record deal wortharound $600 million for a fleet of 40 brand newprivate jets including 20 Cessna Citation CJ2+jets, 9 Hawker 850XP and 11 Hawker 900XP jets.The Briley Group is the majority shareholder inthe privately-owned BJETS. The other signifi-cant shareholder is the Tata Group promoted In-dian Hotels Company.
Bjets is expected to launch its services withinthe next one month and will have 15 aircraftwithin the first 12 months of operations.
"A soft launch of our services should start ina couple of weeks. It will be a kind of test launchas we will mainly be carrying friends and fam-ily in order to be able to finalise the pricing, op-erational costs among other things. The pric-ing will be comparable to Netjets," Mark Baier,CEO of BJets said.
“We should have 14 to 15 aircraft by the endof 12 months of operations," he added.
Private charter company, Ran Air Services,is in talks to acquire a Delhi-based privately-held maintenance, repair and overhaul (MRO)company, Shaurya Aeronautics.
Apart from these there are many other inter-national and domestic air charter firms lookingto garner greater market share of the burgeon-ing Indian private and business aviation sector.
The business jet division ofBoeing, one of the largest air-craft manufacturers in the
world, is also one of the major busi-ness jet manufactures and sellers inthe country. Boeing Business Jets(BBJs) is a joint venture betweenBoeing and General Electric.
Boeing Business Jets are consid-ered so top of the line that the Indiangovernment itself has ordered threefor the transportation of the PrimeMinister and other VVIPs and spe-cial dignitaries.
The company has already deliv-ered two of these and the third is ex-pected by the end of this year, saidSteven J Hill , who heads the Boe-ing's business jet division.
"We have a fifty year old brand-ing in India and the fact that India'scommercial aviation sector dependsheavily on our aircraft helps us getin roads into the country's privateand business jet market like no othercompany can," Hill said.
"Our aircraft are top of the line inluxury and usability. People essen-tially move up from smaller aircraftafter they gain a certain level of af-fluence," he added.
The company already boasts animpressive order book with around100 aircraft in operation and another40 in backlog till May 2008.
"One major advantage that peo-ple have with a BBJ is that range isnot an issue," Hill said. "and you canland the upcoming Boeing 787 any-where you can land a smaller Boeing737," he added.
On the aircraft that BBJ has deliv-ered to the Indian government forthe VVIPs, Hill said that the first ofthe two aircraft have already beendelivered are almost complete withtheir refurbishment in the US.
The uprated 737-700 aircraft forthe Prime Minister is India's first VIP 737 is the 100th aircraftbuilt by BBJ.
The "green" (unfurnished) air-craft, which was handed over by BBJin Seattle in December 2006, wasthen fitted out with a stateroom, aconference room, a communicationscentre, a living-cum-sleeping spacefor the VIP and seating for 48 lesserpersonages. A company called PATS
Aircraft did this in Delaware. Suchluxury jets are available to anyonewho can pay the equivalent ofRs 300 crores.
What money cannot buy is themilitary equipment needed to safe-guard VIPs from missiles fired fromthe ground and from other aircraft.The Indian VIP jets will be fittedwith American equipment - believedto be an advanced version of theAN/AAQ-24 LAIRCM (Large Air-craft Infra-Red Counter Measures) -which quickly detects a missile firedtowards the aircraft.
It then electronically paints aghost image of the aircraft some dis-tance away, which diverts the missile towards the ghost image,saving the actual aircraft. If thespecifications and frequencies usedby this equipment are made avail-able to an enemy, it can be counteredor jammed.
The VIP aircraft is also fitted withcommunications equipment, whichwill allow the PM to communicatewith New Delhi through satellitechannels. When contacted, BoeingIndia declined to comment on the sale.
“India is on the threshold...”While Hawker Beechcraft may be the global
market leader for business and private jets in theworld they are not getting complacent in India
On the back of an economythat is expected to grow at awhopping 8.5% and a mar-
ket for business aviation that is ex-pected to grow at a compounded an-nual growth rate (CAGR) of around25% over the next ten years, - Inter-Globe General Aviation is posi-tioned to be part of the demand foraircraft in the country.
The company, which launchedone year ago,is the latest addition tothe Gurgaon based InterGlobe En-terprises and is responsible for thesales and service of HawkerBeechcraft products withinSAARC.
"India will experienceGDP growth of 8.5% inthe financial year 2008-09, furthermore India'saviation industry islikely to grow at the rateof 25 % over the next 10years. The Indian sub-continent,located as it isbetween the Middle andFar-East trade route,hasstrategic significance,from the point of view oftrade and business.Indiais on the threshold of globalizationof its economy,with the aviation in-dustry poised to play a significantrole, as an engine of growth," NigelHarwood,CEO,InterGlobe GeneralAviation said.
"With India's annual economicgrowth crossing 8% and India be-ing placed 4th in the number ofForbes' list of world's billionaires,the country demonstrates highergrowth potential than the US andChina. The Centre for Asia PacificAviation estimates that there areover 180 aircraft registered for pri-vate, corporate and charter pur-poses. That includes business jets,turboprop aircraft and helicopters.While India's commercial airports
are extremely overcrowded, busi-ness jets can take advantage of astrong network of airports or de-fence airstrips that date back to theBritish colonial era," he added.
HAWKER BEECHCRAFT INDIAMARKET POSITIONING:
Currently with 60% marketshare Hawker Beechcraft has beenthe market leader in business avia-tion across the globe for many years.Recently the firm has taken a largeorder from a charter company, theBriley group promoted Bjets, butHarwood does not believe that it's
just the charter compa-nies that are fuellingthe market growth."It'sa mix of both,howevercharter companiesshare and demand isgrowing and as a resultthey are planning tobuy in large numbers.Historically chartercompanies have in-creased the opportuni-ties for aircraft manu-facturers and havehelped us to sell to pri-
vate companies," Harwood said.And whats the next step for
Hawker in India - to capitalise onthe potential of the Indian marketand then bring in the SAARC coun-tries into our radar of operation,Harwood replies, "Raising inputcosts are a concern for the massesbut not classes.Business aviation isa completely different market. In-put costs can have a direct impact onthe commercial airlines and theirendeavour to recover these costs tobreak-even by partially absorbingthese costs and partially passing iton to the end user. On the contrary,the business owner would have em-bedded this fluctuation already inhis balance sheet."
FORGETHASSLES AND FLY
CHARTERS
Wouldn’t you like tofly what the PrimeMinister is flying
The sheer convenience of private aircraft has ledto the charter companies booming in India
The company is probably the oldest
manufacturer in thecountry and hassold three of its
premier aircraft forthe Prime Minister
NIGEL HARWOOD
