Being an aircraft owner is little fun in India these days. It can be compared to the woes of a Chevrolet Impala owner in the late 1960s: It draws attention and everyone hates you. And in the case of airplanes, it’s not just the neighbours.
Take the case of Aditya Khaitan*, a Mumbai-based entrepreneur. The founder of two listed companies, he started out in the construction business and has diversified into other sectors over the years. Khaitan owns a Hawker Beechcraft (with two other partners) and a helicopter, both bought for his business convenience. Or so he thought.
Consider that for his aviation team at the airport, preparing for a flight out of the city is a mini production. Mumbai’s airport operator MIAL (Mumbai International Airport Limited) has made it clear that it has no space for small aircraft. Consequently, his plane, like many others, is parked in Pune. (It used to be stationed in Nashik earlier, but that airport has its own problems.) Now, when Khaitan needs to use the jet, his pilots have to take a commercial flight to Pune on the previous day, and fly in the aircraft to Mumbai for him.
If that sounds cumbersome, how about this: The plane cannot fly into or out of Mumbai between 8 am and 10 am, 5.30 pm and 7.30 pm, 9.15 pm and 11.15 pm or 2 am and 4 am. These are peak hours for the airport, and the right of way belongs to commercial airlines. And if Khaitan wants to fly to Goa (or any of the dozen-odd defence-controlled airports in India), he has to take into account their curfew timings too. Goa airport, for instance, does not allow civilian traffic between 8 am and 1 pm. “A simple flight to Chennai can become a logistical nightmare,” says his operations chief.
And here’s what’s worse: Khaitan and the dozens of aircraft owners in India are now treated on par with commercial airlines. All compliances, in terms of checklists, documentation and clearances, are the same for airline operators and a single-aircraft owner.
Bigger fleet owners such as Reliance Industries and the Aditya Birla Group—who have several aircraft—can manage this better as they have the manpower required to complete all the procedures. The smaller ones, however, are finding it tough. For instance, Khaitan and his senior management need the jet for flights to, say, Nepal, where he has business interests. But they are currently not allowed international operations. Late last year, the Directorate General of Civil Aviation, civil aviation regulator, introduced new rules through a 300-page rule book called CAP 3100. This mandates that everyone comply with a checklist of 30 to 35 items. Khaitan’s team submitted its papers in June, but is yet to be cleared to fly abroad.
Over a third of the 100 billionaires featured in the Forbes India Rich List this year are aircraft owners. But the hassle of operating a business jet is daunting potential buyers.
India has long been pitched as a big market for private aircraft. Bizjet manufacturers had established India offices and spare depots in the hope that newer (and smaller) entrepreneurs would take to the skies. Indian business jet owners have over the decades bought planes from the big legacy plane-makers who provide spare and maintenance support in India. Four of them—Gulfstream, Bombardier, Cessna and Hawker Beechcraft—are from North America. French plane-maker Dassault and Brazilian Embraer are the others. Competition is stiff and all of these had hopes of big business from India.
And many pharma and tech billionaires were taking test-rides, trying to choose between different aircraft types. But new data belies these hopes. The number of business aircraft registered in India has declined over the last one year. Data from Business Aircraft Operators Association (BAOA), a forum established by aircraft owners, shows a fall from 2012 when 556 business aircraft were registered to 552 in 2013. The numbers are likely to be lower this year. There have been few new sales and a glance at online aircraft trading websites shows that half-a-dozen Indian registered aircraft are listed for sale.
Industry insiders say red tape is killing private aviation. And this is a serious drawback to the ease of doing business in India. Foreign investors and fund managers on short, multi-city trips to India often face the brunt of this gap. For instance, when real estate tycoon Donald Trump visited Mumbai in August, he had to cool his heels in his ultra-luxury Boeing 757 at the Mumbai airport for nearly four hours as his staff scrambled for permission to land in Pune. The IAF headquarters in New Delhi had to grant clearance because foreign nationals were on the plane. It took off after the paperwork was complete.
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(This story appears in the 14 November, 2014 issue of Forbes India. To visit our Archives, click here.)
Govt should allow them construct their own airports.Corporates can do it.on Nov 3, 2014