Date
24 January 2017
Business aviation growth potential in India continues to be weighed down by high fees, taxes and bureaucracy, says Bombardier. Photo: Bloomberg
Business aviation growth potential in India continues to be weighed down by high fees, taxes and bureaucracy, says Bombardier. Photo: Bloomberg

Why India’s billionaires want their own airport

India offers a potentially robust market for business jets, but the country’s cumbersome rules and inadequate aviation facilities are deterring its growth.

The simple process of seeking flight permission can delay private planes for days. And as a result, India’s fleet of business jets continues to shrink even as the economy grows by 7 percent.

Which is why a group representing billionaires such as tycoon Anand Mahindra wants to develop a network of airports just for private jets, Bloomberg News reports.

The group, the Business Aircraft Operators Association, is lobbying the government to turn an airport about 137 kilometers (85 miles) from the financial capital Mumbai into the country’s first airfield exclusively for business planes.

It’s currently used by state-run Hindustan Aeronautics Ltd. for military aircraft.

“It’s about building an ecosystem for general and business aviation, and it’s also about creating jobs,” Jayant Nadkarni, the association’s president in Gurgaon near New Delhi, told Bloomberg in an interview.

“Our industry is in recession. We’ve seen slowing growth for the last seven to eight years, and this year it will be less than zero percent.”

Greater China had 330 business jets in 2013, more than double India’s 125, according to estimates from Bombardier Inc.

The aerospace company forecasts stronger growth in India than China by 2033 — more than 900 percent to 1,320 aircraft versus 600 percent to 2,525.

The problem, Bombardier says, is that India’s “business aviation growth potential in the near term continues to be weighed down by high fees, taxes and bureaucracy”.

Fleet expansion has outpaced infrastructure growth, leaving inadequate facilities in Mumbai, the Montreal-based plane maker says.

The government needs to ease some of the operational bottlenecks that continue to plague the business, according to Mark Martin, founder of Dubai-based Martin Consulting LLC.

India is the fastest-growing major economy along with China, and according to Cap Gemini SA and Royal Bank of Canada, the wealth of its high net worth individuals expanded at the quickest pace in the world last year to US$785 billion.

That indicates a strong market for private planes.

The nation of 1.27 billion also has the seventh-biggest land area, with hundreds of airports that are too small for commercial airliners. Business jets can also be used as air ambulances, and are able to fly to remote areas.

Overall air travel is also growing, in part because of base fares sometimes as low as 2 US cents on commercial carriers. Indian airlines need 1,740 new planes over the next 20 years valued at US$240 billion, according to Boeing Co.

The average net worth of a private jet user is about nine times greater than a passenger flying first class in commercial carriers, according to Fabrizio Poli, managing partner of aviation firm Tyrus Wings in London.

Allowing the rich to travel more easily encourages them to invest and create jobs, he said.

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RA/CG

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