NEW DELHI: Some years ago, a business house in India may have found it easy to leave its footprint on the skies. After all, it wasn’t an arduous task to be among a few, who could boast of a personal business jet. But that was before the economy soared. And when it did, it grounded the claim that business jets are meant to be for a few.
Now, you can ask for a tailor-made requisition for not only the aircraft type but also how you want to own it. There are not only different models of business jets that you can buy but also a whole array of ownership models: fractional ownership of aircraft, on-demand charter, jet card programmes and sundry other schemes to pick and choose from to own or hire a personal jet.
With India boasting of more than 100,000 millionaires and their number growing at 20% each year, it doesn’t come as surprise that global biggies such as NetJets and BJETS have entered the Indian airspace. But it’s not the foreign birds alone, home-grown companies such as the Bird Group and Club One Air are too trying to tap the potential with the ‘right’ model.
If figures set any precedents then it looks that the Indian aviation sector is set to break all sound barriers. Nevada-based, aircraft manufacturer, Aerion which is developing supersonic business jets has already got three orders from India. The price of the jet, which can seat 8-12 passengers, is $ 80 million (around Rs 240 crore) and it’s expected to enter service in 2014. A company spokesperson affirms that for them India is one of the most promising countries for long range business jets because of expanding global business relationships.
So what makes India a lucrative destination for hi-fliers? According to consultants Ernst & Young’s report: Few players and burgeoning demand. Currently, the charter aviation market in India is fragmented with around 32 companies (with an average of two aircraft each) and it expects the demand for business jets in India to grow at 50% annually. As per Brazil based executive jet manufacturer, Embraer, India owns 12% share of the global business jets market, which will only grow from here on.
With such a big market set to open, all players are eyeing to take off on this growth runway and are coming up with different models to emerge winners in this race for business jets.
NetJets, which in 1986 revitalised the general aviation market with its concept of fractional ownership —allowing businesses to purchase shares in a jet to reduce cost of owning it — is currently testing the skies. “By establishing a dedicated sales presence in India we hope to get to know the market and signal that we are serious about entering in due course,” says a NetJet official. As of now the company is offering their existing European and North American programmes to Indian customers through a local representative, Shreyans (a company which distributes and retails luxury products such as Porsche, Fendi, Audi in India).
The pioneers of ‘fractional ownership’ model may be watching the Indian skies but Manav Singh, MD, Club One Air has already started the Indianisation of the same. Singh, who recently placed orders for 11 Eclipse 500 jets investing around $ 25 million, will be starting a low-cost air charter company in July this year. Eclipse is an affordable aircraft as it’s price tag is Rs 8 crore and the maintenance cost is 50% less than other business jets.
Singapore-based BJETS will also be offering fractional ownership of aircraft besides a prepaid block charter for 25 hours. The company is bullish on the aircraft management service as well. Says, Mark Baier, CEO, BJETS: “ We’ll start with 26 aircraft in India. We have already started getting several requests for both fractional ownership of aircraft and the card membership.”
The company in which the Tatas picked up a stake, has already ordered 40 aircraft (20 Cessna Citation CJ2 and 20 Hawker 850XP and 950XP) investing around $ 600 million. “India is a strong market for us. We will start operations in the next 3-4 months,” says Baier. Meanwhile, another global player, Zurich-based ExecuJet Aviation headquartered (distributor of Aerion and Bomabardier business jets in 33 countries) is planning to open an office in India in the next few months and introduce a business aircraft acquisition scheme called ‘Simpli Fly’.
Under the model, ExecuJet will acquire aircraft for the interested business house, maintain it at a fixed monthly fee and if the business house wishes it will charter it out to third party, when not in use, to offset the monthly charge. Home-grown company Bird Group plans to offer a similar service. Ankur Bhatia, ED, Bird Group explains: “The cost to a user of flying a business jet varies from Rs 30,000 per hour to Rs 120,000 depending on the aircraft type.
Chartering out a plane when the company is not using it, means that the net cost for the company who owns it might ultimately come out to be zero.” Bird Group is also rolling out another service called ‘on-demand’ charter.
“This means a business house or an individual will have access to fixed number of hours that it will have to commit to the charter company,” he says. Bird Group is looking at acquiring 10-12 aircraft in next one year, has signed an agreement with Regourd Aviation, a global professional aircraft dealer and broker specialising in the sale of business airplanes and helicopters. With so many models available it looks that consumer is spoilt for choice, but the debate that which model will fly well with Indian consumers has already begun.
Which Model Will Fly
According to analysts, all models can work as they target specific needs. “For those who fly less than 25 hours a year on-demand charter works well, for those flying for 25-50 hours a year availing for a membership card is an ideal deal while fractional ownership is for those who travel by air more than 50-200 hours a year,” says Baier.
Others hold view that a lot will depend on the infrastructure and the aviation policy. “Fractional ownership has been reasonably successful, though it has not met our expectations. However, suddenly we have a lot of interest in it again,” admits Singh of ClubOne Air.
With around 30 business jets delivered in 2007 and another 45 likely to be delivered in 2008, it looks that the industry will have to undergo the test flight for different models. Now, for the ‘jet’ventrous generation Buggati and Rolls Royce are passe, it’s time to own a business jet!