Business aviation in As demand grows, operators contend with infrastructure and regulatory challenges by Anand and Madhura Katti

The growing number of international leisure travelers visiting India is responsible, in part, for the nation’s emphasis on improving its aviation infrastructure.

I For example, the Taj Mahal, one of the country’s T T

A most powerful attractions, draws between two and K

D four million visitors annually, some 200,000 of whom N A

N are from outside India’s borders. A

usiness aviation is on the upswing in (77 helicopters and eight fixed wing) in India currently boasts 454 airports and Mishra told AIN, “The government’s India, and the country is poised to ex- India. There are 88 nonscheduled operation airstrips, but not all of them are operational. Vision 2020 envisions creating infrastruc- Bperience an even bigger boom in the certificate holders with 255 aircraft. Private The nation has 16 international airports, ture to handle 280 million passengers by sector as a result of favorable demographics owners operate 193 aircraft. Demand for 102 airports for civil and general aviation 2020. Investment opportunities of $110 and rapid economic growth. International in- private aircraft is increasing, according to and 97 owned and operated by the Airports billion are anticipated through 2020, con- bound traffic is also growing in parallel with Government of India Ministry of Civil Avi- Authority of India (AAI). The government sisting of $80 billion in new aircraft and increasing investment and trade activity. The ation Joint Secretary Arun Mishra, who told of India has allowed private investment in $30 billion in development of airport infra- nation is attracting more international leisure AIN that the ministry approved 100 applica- aviation infrastructure at five airports. structure.” The government plans major travelers, reinforcing demand for invest- tions for import of general aviation aircraft The AAI is conducting a feasibility investments in new airports and upgrades ments in aviation infrastructure. in 2006, and 200 (including helicopters) last study to look into the commercial viabil- of existing airports, he added. Located between the Middle East and year. Fifty-six new nonscheduled or charter ity of developing 32 currently nonopera- According to Singh, and Delhi Far East, the Indian subcontinent has strate- operators were given permission last year. tional airports across the country for are the two major hubs for business gic significance for trade and business, and commercial use. Most of these airports aviation in India. Both airports have been the aviation industry is poised to play a Airport Infrastructure were closed due to commercial nonviabil- privatized and are being upgraded, to the major role in the nation’s growing economy. As the Indian economy has grown in ity and underutilization of runways. tune of $4 billion, between 2006 and 2016. According to The Economist Intelligence recent years, there has been a substantial Unit, India might host 411,000 millionaires increase in demand for aviation capacity. by 2017, making the nation one of the To compensate, India has invested in new world’s fastest growing markets. airports, terminals, runways and surveil- General aviation in the nation is grow- lance infrastructures. ing faster than aviation as a whole, accord- India Civil Aviation minister Praful Patel ing to Capt. Karan Singh, president of the has said, “We will immediately upgrade 35 Business Aviation Association for India existing airstrips. Every person living in (BAAI). “All major business houses and India should be within 50 kilometers [31 high-net-worth individuals are aspiring to miles] of an airport,” as opposed to the own aircraft,” he told AIN. He further ex- current 150-km [93-mile] trip to the airport plained that the mindset of business leaders for many passengers. The country plans to has changed as Indian companies now have have 400 operating airports by 2020. The N O global ambitions. “Aircraft are considered ministry is also envisioning “merchant I T A I V

a tool and not a toy,” he said, noting that airports” that will be independently devel- A

L A

aircraft ownership extends to many small oped and run by private companies. R E N and medium-sized companies. E G

As more business aircraft are based in India, E Currently there are 258 multi-engine tur- B companies such as Delhi-based InterGlobe O L G

bine aircraft (99 helicopters and 159 fixed General Aviation are opening to serve the R E T N wing) and 85 single-engine turbine aircraft needs of bizav operators. I

54aaAviation International News • November 2008 • www.ainonline.com General aviation can use any of the Economic Zone next to Nagpur Airport for an initial value of $10- to $20 million pand into a full-fledged MRO facility for existing airports or airstrips. If the operator an MRO facility. The company plans to in- annually, increasing in size and complexity private jets in India by 2010. With that in wants to use a nonoperational airport, he vest $100 million for the project, though de- as business opportunities develop. mind, it plans to open its next authorized must obtain advanced permission from the tails of the agreement have yet to be decided. Bengaluru is also the home for the Airbus center in Mumbai later this year and one in district magistrate’s office to give the office Bravia has acquired 35 acres of land Engineering Centre India, part of EADS either Chennai or Bengaluru by next year. a lead time to provide services. A number for building hangars. Mumbai-based Max Technology Centre India. This campus-style In addition, next year it will add Gulfstream of states are realizing the value of operat- Aerospace, building a smaller MRO in institution performs engineering and infor- and Cessna to its service offerings at Delhi. ing a dormant airport and making airports Nagpur on 15 acres, will be the third com- mation technology services. Airbus Engi- According to Harwood, “Unfortunately, within the district available for landing and pany to open an MRO facility at the site. neering Centre India, a subsidiary of Airbus, the expansion of MRO/FBO facilities has parking of private aircraft. The airplane Max Aerospace & Aviation performs focuses on high-end engineering analysis not kept pace with growth in general avia- operator pays a small fee for the service. airline engineering services on the Boeing and design. Indian engineers develop ad- tion and is inadequate. The recent tender The country is also adding greenfield 737-400/700/800/900, Airbus A319/320/ vanced modeling and simulation and are from Delhi Airport for an FBO, we believe, airports–facilities built outside the main city 321/330/340 and ATR 42/72. Managing involved in the design and production of is the beginning of an emerging trend of limits–where there is room for future devel- director Bharat Malkani told AIN that the new aircraft such as the A380 and A350. FBOs across India. We are beginning to opment as demand rises. Greenfield airports company is establishing the Nagpur MRO For business aircraft, India-based Inter- see encouraging signs that can only assist at Bengaluru (formerly Bangalore) and to “offer additional maintenance services to Globe General Aviation and Hawker Beech- in this market.” Hyderabad are being built by private consor- For the first time, New Delhi Indira tia at a total cost of more than $800 million. Gandhi International Airport operators A modern greenfield airport in Bengaluru floated an Expression of Interest for an was commissioned in May this year. FBO two months ago. Unfortunately, the A is being planned construction of an FBO at Mumbai Air- at to serve as the city’s sec- port has run into legal obstacles and is ond airport. It is being developed by a currently dormant. public/private partnership at an estimated cost of $2.5 billion. Charter and Fractional Operations In August the India Civil Aviation min- As the economy grows and more people istry approved AAI’s plans to upgrade recognize the value of business aviation, Chennai and Kolkata airports. Kolkata Air- Indian businesses have looked to charter port, slated to receive $451.75 million in and fractional aircraft as a transportation upgrades, will be complete by early 2011. alternative. The nation’s tax rules–25 per- Chennai Airport will be modernized at a cent on the purchase of an airplane–have cost of $420.47 million by the end of 2010. made charter flights and fractional owner- In addition to building new airports, India ship more attractive to Indian clients than I is upgrading the technology at its existing T whole ownership. As a result, a number of T A K

facilities. The AAI added A-SMGCS (ad- A charter and fractional services have sprung R U vanced surface movement guidance and H up in the region. First, BJets, a member of D A control systems) to three of the country’s M the Briley group in partnership with the busiest airports in June. Era Corp., in part- nership with the Holland Institute of Traffic Rajiv Ghandi International Airport in Hyderabad Technology, will provide multilateration and is one of the greenfield airports–airports located outside the city proper–in India. It is one of India’s ADS-B surface surveillance systems at Chha- 16 international airports. The modern airport trapati Shivaji International Airport in Mum- includes a nod to the traditional with its depiction of bai, Anna International Airport in Chennai the Ramayana epic, above, a tale of virtue’s triumph and Netaji Subhash Chandra Bose Interna- over vice that is fundamental to Indian culture. tional Airport in Kolkata. The system will allow for improved operations during IMC. our customers from both India and abroad.” Thirty-five other city airports are also the Max Aerospace & Aviation recently un- subject of upgrade proposals. According to veiled a 30,000-sq-ft hangar and maintenance Deccan Aviation executive chairman Cap- facility at Aerodrome in Mumbai. tain Gopinath, “Today, state governments U.S.-based Duke Aviation has agreed are in a better position to pioneer the next to set up an MRO facility at Nagpur. Ma- stage of the aviation revolution to assess harashtra Airport Development Company I the connectivity needs of their region and (MADC) vice chairman/managing direc- T T A K

pioneer new airports.” tor R.C. Sinha told AIN, “Duke Aviation, A R U

For example, the government of Maha- investing $35 million in the project, will H D A rashtra state is working with the national be allotted 30 acres of land.” The com- M government to develop the existing Nagpur pany will begin with nonengineering work Airport, located in the geographical center on curtains, flooring and painting before craft opened a Hawker author- Tata group’s Indian Hotel Co. (which runs of India as a multimodal international taking on engine maintenance work later. ized service center at the Indira Gandhi Taj hotels), launched what it says is Asia’s passenger and cargo hub airport. The proj- India’s Jet Airways has approached International Airport in Delhi in June. This is biggest fractional and block charter private ect includes upgrading the existing airport Nagpur airport authorities about obtaining the first authorized service center for Hawk- jet company in the third quarter. to international standards as well as the space to start its own MRO facility. ers in India. The facility also serves opera- BJets CEO Mark Baier told AIN the construction of a second parallel runway Bengaluru in South India is another tors in Afghanistan, Bangladesh, Bhutan, the company has begun operating flights for and modern terminal buildings. popular base for aircraft manufacturing Maldives, Nepal, Pakistan and Sri Lanka. select clientele in the region. He pointed and operations. In December 2003, Boeing Last year India became the third largest out that representatives of multinational Aircraft Maintenance established a wholly owned subsidiary, Boe- geographic region for sales of Hawker companies who are already using business The growth of aviation has also necessi- ing International Corp. India Pvt. Ltd., there Beech aircraft (behind the U.S. and Brazil). jets elsewhere are likely to be the first cus- tated development of maintenance facilities, to support the growing demands of India’s Nigel Harwood, CEO of InterGlobe tomers for these services. Regional compa- some of which are specializing in business aviation, aerospace and defense industries. General Aviation, told AIN that by year-end nies, as well as individuals from India’s aircraft. Before these services were avail- In December, Bengaluru-based Hindustan the company will have DGCA approval to growing corporate world and Bollywood, able, international airlines and private Aeronautics (HAL) signed a 10-year memo- maintain 12 different types of aircraft. and sports personalities for whom time domestic airlines used ’s MRO randum of understanding (MOU) with Boe- The company’s 18,300-sq-ft facility is at a premium, are logical users of these services at Mumbai and New Delhi or trav- ing to bring more than $1 billion of new features a VIP lounge, pilot offices, crew services as they seek to save time for eled to the Middle East for maintenance. aerospace manufacturing work to India. lounges, maintenance support offices and a family and other activities. Nagpur is fast emerging as an interna- Under the agreement, Boeing and HAL hangar that can perform maintenance on The company has ordered 20 Cessna tional aircraft maintenance hub. Boeing has will explore business opportunities aimed up to six aircraft at a time. Citation CJ2+s, 20 Hawker 850/900XPs already been allotted 75 acres in the Special at transferring work packages to India with InterGlobe General Aviation plans to ex- Continues on next page u

www.ainonline.com • November 2008 • Aviation International Newsaa55 Business aviation in schedules at regular frequencies and drasti- cally reduces road travel time. The com- pany intends to extend operations to more locations in the city. Deccan Aviation also plans to launch IContinuedndia from preceding page u charter operations with two helicopters each and 10 Hawker 4000s. It will have 15 air- in Hyderabad and Mumbai by year-end. craft by year-end. Baier told AIN that while the company’s Challenges for Growth of GA operations hub is at the new privately oper- One of the primary obstacles to the ated Rajiv Gandhi International Airport in growth of general aviation in India is the Hyderabad, it will have aircraft positioned fact that the purchase and importation of at major airports and will fly customers aircraft is a tedious process, requiring throughout India and Southeast Asia. clearance from a number of agencies. GMR Hyderabad Airport CEO P.S. Nair There is an import duty applicable only to told AIN, “Three business aircraft support aircraft purchased for general aviation, and operators are negotiating for all FBO serv- there are basically two categories of permit Arctic Ocean ices with us. We have provided exclusive for importing aircraft for GA: one is pri- parking space for business jets and plan to vate and the other is nonscheduled opera-

Beaufort Sea Greenland Sea have an FBO by year-end.” tor. All private airplanes incur a duty of

Baffin Bay Another fractional company, Club One approximately 25 percent, which includes GREENLAND Norwegian Sea Air, will launch its low-cost arm this 3-percent customs duty, 16-percent coun- ICELAND FINLAND TAJIKISTAN NORWAY SWEDEN TURKMENISTAN RUSSIA RUSSIA Bering Sea CANADA Hudson Bay ESTONIA AFGHANISTAN Labrador Sea North Atlantic Ocean North Sea CHINA Gulf of Alaska DENMARK LATVIA LITHUANIA PAKISTAN NETH. Sea of Okhotsk U. K. BYELARUS New Delhi IRELAND BELGIUM POLAND NEPAL Agra BHUTAN LCUX.ZECH KAZAKHSTAN SLOVAKIA UKRAINE AUSTRIA MOLDOVA SWITZERLAND HUNGARY MONGOLIA INDIA CROATIA ROMANIA Caspian Sea BANGLADESH FRANCESLOVENIA Aral Sea BOSNIA Arabian Sea Kolkata2 ITALY Black Sea GEORGIA UZBEKISTAN YUGOSLAVIA KYRGYZSTAN Nagpur U. S. A. BULGARIA AZERBAIJAN NORTH KOREA ALBANIA MYANMAR PORTUGAL MACEDONIA ARMENIA TURKMENISTAN Sea of SPAIN TURKEY TAJIKISTAN Mumbai1 Japan GREECE Vishakhapatnam TUNISIA MALTA SYRIA Hyderabad SOUTH KOREA CYPRUS IRAQ JAPAN LEBANON CHINA IRAN Indian Ocean Bay of Bengal MOROCCO ISRAEL AFGHANISTAN JORDAN Bengaluru3 Canary Islands ALGERIA KUWAIT NEPAL PAKISTAN Chennai Gulf of Mexico LIBYA BAHRAIN OMAN BHUTAN Andaman Sea EGYPT 1 Bombay THE BAHAMAS Atlantic Ocean WESTERN SAHARA QATAR BANGLADESH 2 Calcutta 800 km SAUDI ARABIA U. A. E. INDIA MEXICO 3 Bangalore SRI LANKA TAIWAN OMAN 500 mi CUBA MYANMAR DOM. REP. Red LAOS JAMAICA MAURITANIA NIGER Bay of Bengal MALI Sea BELIZE HAITI Philippine Sea Pacific Ocean HONDURAS ERITREA YEMEN South China Sea Caribbean Sea SENEGAL CHAD SUDAN THAILAND GUATEMALA NICARAGUA GAMBIA VIETNAM PHILIPPINES EL SALVADOR DJIBOUTI KAMPUCHEA GUINEA BISSAU GUINEA BURKINA PANAMA BENIN COSTA RICA VENEZUELA SRI LANKA GUYANA SIERRA LEONE IVORY COASTTOGO NIGERIA ETHIOPIA SURINAME CENTRAL AFRICAN SOMALIA FRENCH GUIANA REPUBLIC BRUNEI LIBERIA GHANA COLOMBIA MALAYSIA EQUATORIAL GUINEA UGANDA KENYA CONGO ECUADOR SAO TOME & PRINCIPE GABON RWANDA ZAIRE Indian Ocean BURUNDI

INDONESIA TANZANIA PAPUA NEW GUINEA BRAZIL Arafura Sea PERU ANGOLA MALAWI Timor Sea ZAMBIA Coral Sea BOLIVIA Pacific Ocean NAMIBIA ZIMBABWE MOZAMBIQUE MAURITIUS India’s location between the Middle East FIJI BOTSWANA PARAGUAY Reunion and Far East positions it well for further NEW CALEDONIA CHILE MADAGASCAR economic growth. AUSTRALIA SWAZILAND LESOTHO ARGENTINA SOUTH AFRICAmonth, according to managing director tervailing duty, 4-percent special additional URUGUAY Great Australian Bight Manav Singh. The company will begin duty and some surcharges. Tasman Sea operations with 10 VLJs; but it has not yet Capt. Singh of India’s business aviation NEW ZEALAND specified which model it will fly despite the association said, “That is a dampener for claimed imminence of operations. He said the growth of the segment. Forty percent of

FALKLAND ISLANDS SOUTH GEORGIA ISLAND the low-cost service would be the first of its prospective buyers might put off their kind and would be targeted at members of plans. If a person is buying an aircraft for middle as well as senior management. Club $20 million, he might sell it after two years One Air already operates eight aircraft at the same cost. In that case a 25-percent offering charter service. duty will be a loss for him.” BAAI is lob- Singh said, “No airport in India has bying the Indian government to reduce the exclusive infrastructure for general avia- import duty on aircraft purchases. tion yet. The segment has potential to He pointed out that users of business grow substantially if AAI and the Indian aircraft provide a revenue source for the government [can fix that].” government beyond the import duty. “The In July this year helicopter charter com- government earns incidental revenues from pany Deccan Aviation launched Deccan this sector in many other ways. Also, the Skylimo, India’s first helicopter shuttle serv- buyers are high-profile individuals who add ice from the new Bengaluru International to the country’s economy through their Airport (BIAL) to key business locations in business activities.” Bengaluru. Deccan Aviation executive Another obstacle for business aviation is chairman Capt. G.R. Gopinath told AIN, the length of time required to obtain permis- “The service will effectively cater to the sion to operate in the country. Foreign oper- growing spectrum of business and leisure ators must give notice of at least seven days travelers looking for time efficiency.” before their arrival. That can extend to as The Skylimo service connects BIAL much as a month if they have to land at with the old airport and with the electronics Pune, Agra or Visha-khapatnam, which are city at prices of $112 and $135 per person, under India’s defense control. BAAI is also respectively. The service offers convenient lobbying for a reduction in licensing time. J

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