General aviation in India, growth, opportunities and challenges

Introduction

Aviation normally connotes a dichotomous division into:

• Civil Aviation

• General aviation.

Civil aviation is further classified into:

• Military

• Government and private airlines (airliners).

General Aviation deals with private aircraft owners, corporate-owned aircraft, flying clubs, small taxi operators, etc. Thus, General Aviation includes all aircraft not flown by the government and private airlines called regular and/or military operators.

General aviation (GA) is also seen as a catalyst for economic growth. Companies using general aviation are said to gain a competitive advantage, while communities gain job opportunities and access to the nation’s expanded air transportation system.

It benefits users of transportation services and the country’s economy in general. It increases the efficiency and productivity of businesses by reducing the travel time that would be required to drive or use more congested commercial airports. Provides training for most new pilots.

Businesses/government agencies may use aircraft/helicopters to:

• For corporate use

• Offshore purposes, especially helicopters

• Emergency Medical Services (EMS)

• Disaster management

The latest statistics from the civil aviation sector show:

• Up to 100 per cent of FDI is allowed under the automatic route for Greenfield projects.

• For existing projects, FDI of up to 100 percent is allowed; while investing up to 74 percent under the automatic route and beyond 74 percent under the government route.

The Indian aviation industry is one of the fastest growing aviation industries in the world with private airlines accounting for more than 75 per cent of the domestic aviation market sector (as of 2006). With a compound annual growth rate (CAGR) of 18 percent and 454 airports and runways in the country, of which 16 are designated as international airports, the time has come to monitor the increasing growth of the aviation sector.

Today, the general aviation sector is the most neglected in the civil aviation industry. He is treated like a stepchild of aviation in India. There are no separate guidelines for general aviation. In India there is no concept of FBO (Fixed Base Operator), helicopters or GA (General Aviation) terminals. The maximum use of general aviation is in corporate charter flights, followed by offshore operations through helicopters, tourism, etc. In the private charter industry itself there is an estimated Rs.2900 crore business and it should not be neglected. General aviation in India is a very niche market, especially as it is hassle free and instantly available status. Additional value benefits of private jets are that you can fly to destinations not covered by scheduled airlines, you have access to over 400 runways (only 90 are operational at the moment). The versatility of helicopters to go where nothing else can is not being exploited to its full potential.

The reasons that have led to the low growth of general aviation are mainly:

Lack of infrastructure- There is no availability of FBO (Fixed Base Operator) terminals. The number of ground handling agencies is extremely restricted, there is no availability of MRO’S (Maintenance, Repair and Overhaul) and the cost of maintenance increases. There is no separate parking and helicopters operate from the airports. There are no helipads or heli-routes in India to date.

Restrictive Regulations: Too many agencies are involved in the procedure of getting a private jet such as Ministry of Home Affairs, Ministry of Civil Aviation, Directorate General of Civil Aviation, Civil Aviation Security Bureau and Airports Authority of India . The 25% tax is only restricted to corporate jets, which drives up costs. The owner has to limit himself to the operating times in the main subways, which makes private property useless.

Lack of manpower: There is a shortage of pilots and engineers. In India there are 35 flight schools, which are not producing the required number of pilots. There is a demand for about 50,000 employees and 15,000 engineers in the airline industry.

The general aviation sector still has a wide margin for growth, due to the intervention of private actors and the availability of purchasing power between the classes. The Commercial Aviation Association of India estimates that general aviation in India is likely to grow by 30% to 40%. With over 700,000 Indians representing an accumulated wealth of $3 billion, this is hardly surprising. Deregulation, the availability of funds, the relaxation of regulations for foreign investment in Indian companies and, paradoxically, the painful experience of traveling on a commercial plane are driving this growth.

the road ahead

Investment opportunities of $110bn are being considered through 2020 with $80bn for new aircraft and $30bn for airport infrastructure development, according to the Indian Investment Commission.

• Indian aerospace companies are also growing. Hindustan Aeronautics Limited (HAL) was ranked 40th in Flight International’s top 100 aerospace companies list last year.

• Major aircraft manufacturer Boeing is in the process of establishing the proposed $100 million Maintenance Repair Overhaul (MRO) facility in Delhi. Air India is also in the process of launching a cargo hub in Nagpur, while Deccan Aviation has already started one from the city.

• GE Aviation and Air India will jointly invest US$90 million to establish a maintenance, repair and overhaul (MRO) facility in Mumbai.

• Indocopters Private Ltd, a distributor of Eurocopter helicopters in India, plans to establish a helicopter maintenance, repair and overhaul (MRO) facility in Bhubaneswar, the company’s fourth service center in the country.

conclusion

General aviation is growing rapidly in both developed and developing countries. Indian general aviation has not been able to keep pace with the rest of the world due to general misconceptions, lack of awareness and miscommunication between government and public and lack of infrastructure.

With 83,000 billionaires in India and growing at a rate of 20% per year, the potential is staggering. However, there is a strong belief in India that the plane is a luxury item. Realistically speaking, an airplane is not a luxury item. In fact, it can help an organization operate more efficiently with many financial, economic, and social benefits. You can give a multi-utility name to the market.

The impediment to developing general aviation in India is the lack of a development map on how this industry will grow. The necessary infrastructure in all its manifestations is non-existent or woefully inadequate.

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