I write on India's well-established entrepreneurs and corporate houses, covering a range of sectors. In a nutshell, I'm the Jack of all business news beats. In addition, I am the go-to reporter for aviation news at Forbes India.
About three months ago, a Gulfstream G650, a leading luxury business jet, flew into New Delhi from the US. The aircraft, which was chartered for a one-way trip, would have normally returned empty legged to its home airport. But this is the Information Age. Many high net worth individuals in the country were notified of the empty leg charter space in the aircraft thanks to JetSetGo, a New-Delhi based startup that aggregates private jets, much like Uber does with cabs. Soon enough, a member of one of India’s top business families chartered the aircraft to Nice, in France, for about £58,000 (around Rs 58 lakh).
Likewise, around the same time, JetSetGo got 19 inquiries for an Airbus Corporate Jet that was to return to Europe without passengers after being booked for a one-way trip to New Delhi. Eventually, a US-based industrialist chartered the jet for 95,000 euros (approximately Rs 70 lakh).
For the affluent, there is nothing that money can’t buy. “We have organised around four to five birthday parties, for eight- to 16-year-olds, on a private jet in the last seven months,” says Kanika Tekriwal, 27, CEO and co-founder of JetSetGo. The cost of chartering a private jet for a birthday party starts at around Rs 60,000 an hour and can even touch Rs 2.5 lakh per hour, depending on the aircraft. “We have also organised bachelor parties and pre-wedding photo shoots among other experiences on a private jet,” adds Tekriwal, whose company received funding (amount undisclosed) from cricketer Yuvraj Singh earlier this year.
Another notable experience that Tekriwal’s JetSetGo organised recently was a tailor-made, seven-course meal for a couple who wanted to go on a date in a private jet. The menu included ostrich eggs, crabmeat risotto, parma ham and pâté among other delicacies. The culinary air experience cost around Rs 5.5 lakh, which is roughly the cost of a mid-sized sedan.
For India’s moneyed, chartering a private jet is now a breeze compared to a few years ago when the market was fragmented, opaque in its dealings and dominated by brokers and middlemen. “If you didn’t own a private jet, you ended up calling 10 operators, 30 brokers and everyone was misleading you,” says Tekriwal. Her idea of aggregating private jet operators onto an online platform and then creating luxury experiences was aimed at resolving these issues.
Building A Business
Tekriwal found her way into this business by chance and somewhat by design. Brought up in a Marwari family in Bhopal, Madhya Pradesh, Tekriwal says she was told by her parents that they would find a groom for her once she graduated. Life, however, would take a different turn. After her schooling in The Lawrence School, Lovedale in Ooty, Tamil Nadu, Tekriwal enrolled for a course in visual communication and design at the BD Somani Institute of Art & Fashion Technology in Mumbai in 2006.
While in college, she found herself a part-time creative job at the diversified conglomerate Indiabulls, which was at that time setting up an aviation division. And Tekriwal, who had dreamt of being a pilot as a child, got an opportunity to work in that department. In December 2009, she packed her bags and went to pursue an MBA at Coventry University in England. She also bagged a job at Aerospace Resources, a UK-based aviation consultancy firm. “My biggest learning then was that India was a football field of opportunities and no one was capitalising on it,” she says. Her assignments with the firm brought her in close association with air charter companies in India. On completing her MBA, she headed back to India in early 2011.
Days after returning, she was diagnosed with Hodgkin’s Lymphoma, a cancer that affects the lymphatic system. She underwent treatment for about nine months. “The day I recovered, I packed my bags and moved to Delhi because I knew that sitting in Bhopal, I was not going to be able to do anything.” By then, the idea for JetSetGo was already brewing in her head. In the two years preceding the launch of JetSetGo, in March 2014, she had done her own consultancy work.
A year on, JetSetGo gives individuals access to 75 private jets and helicopters in India with the ease of booking the flight online. An updated version of its mobile app is being readied. The startup does not charge any commission (either to the customer or the operator) when its services are used to charter a private jet. It makes its money by billing customers who book luxury experiences and also through empty leg flights, i.e on return trips of aircraft chartered for a one-way journey.
Taking advantage of private jets that return without passengers, JetSetGo sells tickets at highly discounted fares. For example, a Kolkata to New Delhi empty leg flight ticket on a Cessna Citation Excel private jet costs Rs 5.54 lakh. If one had to charter the same aircraft from Kolkata to New Delhi, it would cost double the amount. In some instances, the discount on an empty leg ticket could be as high as 80 percent.
JetSetGo receives around 20 charter queries a day, the bulk of which are from the metros to tier II or tier III cities such as Kadapa (Andhra Pradesh), Belagavi (Karnataka) and Tiruchirappalli (Tamil Nadu) to name a few. Tekriwal, though, admits that some of her top customers are equally happy taking an IndiGo flight, provided the low-cost carrier caters to their destination.
But there are also businesspersons who are willing to part with Rs 7-15 lakh for a one-way chartered flight to Delhi from Mumbai or Bengaluru. In comparison, a one-way business class ticket on a commercial flight to Delhi costs about Rs 25,000 from Mumbai and Rs 30,000 from Bengaluru. What then is the compelling need to charter a private jet? Jayant Nadkarni, president of BAOA (Business Aircraft Operators Association) in India, says a private jet gives businesspersons the comfort and the space to work and unwind, and also helps them get in and out of airports quicker, saving them the long wait to board a commercial flight. “These efficiencies, especially the time saved, helps in increasing their productivity,” adds Nadkarni, who is also the co-founder and chief operating officer of Invision Air, an end-to-end private jet management company.
Increase in productivity apart, air charter firms also find patrons among young entrepreneurs who want to set new trends. Bhupesh Joshi, director and CEO of air charter firm Club One Air, narrates how a first generation entrepreneur did a product launch in the sky for his company’s business partners and stakeholders recently. “They didn’t have any particular destination in mind, so they flew over New Delhi and Jaipur for an hour-and-a-half in a 19-seater private jet,” says Joshi. The charter cost around Rs 10 lakh. “More than the cost, it was about doing it [the product launch] differently,” he says. Club One Air also chartered one of its business jets for a mid-air fashion show extravaganza in June this year.
Clearly, there is a renewed interest in India’s private jet market, which had been under the weather for a couple of years owing to, among other things, the slow pace of economic growth.
Leveraging An Upturn
In the last two financial years, the private jet industry in the country has seen a negative growth of about 2-3 percent as existing owners rushed to sell their aircraft abroad, amid a slowing economy, and not many new jets were being purchased. “When a company’s bottomline is under pressure, it becomes difficult for owners to justify their travel on private jets,” says Rohit Kapur, managing director, Arrow Aircraft Sales & Charters Pvt Ltd. He estimates that around eight to 10 private jets and helicopters were sold by their owners in financial year 2015. The private jet market in India had registered a compound annual growth rate of 18 percent between 2000 and the heydays preceding the 2008-09 economic downturn. Growth peaked at 28 percent in FY08.
With the private jet industry now on the cusp of a turnaround, luxury experiences are gaining currency but the majority of chartered flights continue to be engaged for business needs. According to Kapur, only about 10 to 15 percent of charter flights in the country are devoted to pure luxury experiences. “Most people [businesspersons] charter to go to places that are not so well connected by commercial airlines,” explains Kapur. So, for an executive, luxury and necessity are two sides of the same coin.
And it’s not just air charter services that are gaining popularity. More companies now dream of owning aircraft. Partly helping them offset the cost is the possibility of outsourcing their jets. This is a departure from the trend of private jets in India being owned and operated by big business houses or by a handful of dedicated air charter companies. “Business houses or businessmen from the mining, automotive or pharmaceutical sectors are more willing to buy an aircraft and then outsource its operations to third-party professional operators,” says Nadkarni. His company Invision Air is engaged in talks with seven potential clients to manage and operate their aircraft. In this model, the owner offsets his or her cost through the revenue garnered when the operator charters out the aircraft.
This outsourcing model is finding favour even among mid-sized firms. “They [mid-sized firms] don’t want to get involved in the entire compliance and regulatory aspects of owing an aircraft,” adds Kapur, whose company is also the sales representative for two US-based private jet manufacturers, Gulfstream and Beechcraft, in India.
The Indian Market
To date, nobody has done a study of the private jet industry in India. The BAOA recently commissioned a foreign consultancy firm to assess the size of the market. Captain Sandeep Saraf, founder of Pinnacle Air, a New Delhi-based air charter and maintenance company, shares with Forbes India a back-of-the-envelope calculation: “Among the top Indian metros, there are around 100 private jet charters per day.” He estimates that the maximum number of charters originate from Delhi, followed by Mumbai, Ahmedabad, Kolkata and Chennai.
The potential to grow the market is there and as Joshi of Club One Air says, “It is being driven by first-generation entrepreneurs and the generation-next of business families.” He also shares a rather interesting fact on how ecommerce firms are making inquires for the use of private jets.
These days, Joshi also sees a distinct migration pattern where clients are upgrading from a small private jet to a mid-sized jet and then a larger one. This upgradation results in a price increase of about 30 to 80 percent for the client. Tracking this trend, Club One Air is in the market to buy bigger jets like the Dassault Falcon 7X and expand its current fleet of nine aircraft. The company is also trying to increase its visibility at airports through lounge services.
Confident of the promise the market holds, JetSetGo’s Tekriwal is working to make her startup the one-stop destination for luxury air travel in India. The company has tied up with an array of service providers to offer end-to-end solutions. For instance, when the head of one of the world’s largest pharmaceutical companies came to India, Tekriwal was tasked to make arrangements for a makeshift helipad. The company’s head was travelling by helicopter from Delhi to Sonipat, Haryana. “Once you are in JetSetGo’s hands, leave your troubles to us,” says the feisty entrepreneur. “It’s a lot of firefighting and making flights happen. The biggest problem that the industry suffers from is last-minute cancellations,” she explains.
On the one hand, Tekriwal is planning for luxury experiences such as “flying with the stars”, where individuals get a chance to fly in a private jet with a celebrity (actor or sportsperson). On the other hand, she is busy trying to raise money to take 50 kids affected by cancer on a chopper ride.
JetSetGo has been modelled along the lines of US-based JetSmarter. Founded in 2013 by Sergey Petrossov, JetSmarter has received funding from members of the Saudi royal family. Kapur believes that it’s a “brave attempt” being made by Tekriwal to aggregate a fragmented market. “The model has succeeded in other parts of the world and I hope it does in India too,” he says.
Owning a private jet is a luxury indicator like owning a mansion or a Rolls-Royce. But, Nadkarni of BAOA believes that fewer people are buying jets purely for the status and more for its practical use. “That’s the takeaway—it’s not just luxury, but practical luxury.”