BAOA Demands Separate Regulatory Framework

Issue: 4 / 2014By R. Chandrakanth

The Business Aircraft Operator’s Association (BAOA ) has called for a separate regulatory framework for General Aviation (GA) to remove long prevailing bottlenecks for the sector to grow in India. While the BAOA is optimistic about the growth of the GA sector, it underscores the need for certain prerequisites for the sector’s revival. “There is an immediate need to address some of the issues adversely affecting operational efficiency of non-scheduled and private operators due to airlines specific regulations and circulars being applied to NSOP and private operators without considering the different environment and operating conditions of these aircraft. This has led to inhibiting growth potential of General Aviation and Business Aviation sector, besides negatively impacting job creation.” said Rohit Kapur, President, BAOA.

“BAOA ’s Executive Committee members recently met the Director General of Civil Aviation Dr. Prabhat Kumar and have been assured of immediate action for optimising growth of general and business aviation. We are looking forward to working together with DGCA to bring things back on track” said Group Captain (Retd) R.K. Bali, Secretary, BAOA . In 2013 as many as 19 business jets were sold by their Indian owners in overseas markets. In the same year, the addition to the Indian inventory was just three jets, indicating a negative growth for the first time. It had to come sooner than later as the general aviation industry continues to grapple with myriad of problems, most of it created by governmental policies or the lack of it.

Rohit Kapur said the business aviation industry had been ‘boxed into a situation’ of hard rock and the sea. And the government was just not listening to the various pleas of the industry, as it ‘perceived’ business aviation as ‘personal indulgence’ and ‘corporate excess’ despite business aviation being documented as a business tool and a critical enabler of economic development.

Though the number of general aviation aircraft had gone up from 11 in 2003 to 552 in 2013, the decline in the growth rate of the sector began in 2007 when the government introduced customs duty and did not address infrastructural issues. Data on the imports vs deregistration of business jets indicated the gradual downward slide. In 2010, the number of imports was 48 and deregistration was 20; in 2011 the ratio was 20:17; in 2012 it was 38:31; and in 2013 it was 3:19. Rohit Kapur said that with such trends, the BAOA which in 2012 had forecast that the business aviation segment would grow at 12.5 per cent now has more than halved it. In 2012, it had pegged the probable aircraft numbers at 1,793 by 2020 which as per 2014 projections is 922, down almost by half.

HIGH IMPORT DUTY

In 2006, the government differentiated the customs duty structure, imposing 26 per cent on private jet acquisitions and zero per cent on acquisitions by non-scheduled operators (NSOPs). In 2010, it revised it to 18 per cent for private jet purchases and 2.5 per cent for NSOPs. This differentiation has led to several anomalies. The government should rollback the duty if it has to promote general aviation, the Association has sought.

PROBLEM OF PERCEPTION

Rohit Kapur concurs that the single most challenge for the general aviation industry is that of ‘perception’ that it is ‘pure luxury’ and those in the government do not want to listen to the kind of economic benefits it has to offer to the country as a whole. The industry size is about $2 billion and it provides direct employment to 12,000 and given the right policies, it could grow these numbers and be part of economic enablement.