It is for the government to recognise the value of business aviation, acquiesce to its reasonable demands and facilitate business aviation fleet modernisation
The term ‘business aviation’ is not officially included in the lexicon of the International Civil Aviation Organisation (ICAO) which has an all-encompassing definition of general aviation comprising all civil aircraft that are not operated by commercial aviation or for aerial operations that are specific tasks like crop-spraying. Business aviation is thus a part of general aviation. In 1998, the International Business Aviation Council (IBAC), an international non-governmental organisation with a permanent observer status with ICAO, adopted the following definition of business aviation: “That sector of aviation which concerns the operation or use of aircraft by companies for the carriage of passengers or goods as an aid to the conduct of their business, flown for purposes generally considered not for public hire and piloted by individuals having, at the minimum, a valid commercial pilot licence with an instrument rating.”
India has a special category of non-scheduled operator permit (NSOP) holders which operate commercial aircraft, but have rules and regulations distinct from those governing scheduled airlines. Technically speaking, NSOPs do not come under general aviation as they are commercial operators; but, in India, it is included in general aviation for the purpose of discussion and regulation. The confusion has further been compounded by the sudden increase in import duty in 2007 on aircraft imported for personal and business use from 3 per cent to over 20 per cent. As NSOPs, being commercial operators, were to continue to pay lower rate of duty, there was a scramble by business houses including those with no aviation background, to obtain NSOP to avoid higher rate of duty. Currently, there are 394 aircraft (fixedand rotary-wing) registered under NSOP and another 251 in the private or business aviation category. It will be worth keeping in mind that a large number of aircraft operated by NSOP holders are actually serving the interests of the principal company.
Trends in Business Aviation
Indian business aviation was still trying to find its feet after the 2007 jolt by the government of a duty more than a fifth of the cost of an aircraft, when the 2008 economic downturn struck it in the midriff. International business aviation is showing signs of recovery and, according to Brad Nolen, Bombardier’s Director of Product Planning and Strategy for Business Aircraft, the business jet market is “slowly getting back to pre-recession levels.” Reportedly, business aviation aircraft sales had dipped from their 2008 peak levels to nearly half by 2013. Since then they have moved sluggishly and are showing signs of recovery since 2015. Will the international trend be manifest in India and usher in fleet modernisation?
RATIONALISATION AND OPTIMISATION OF REGULATIONS FOR GENERAL AVIATION WOULD PROVIDE A DEGREE OF CERTAINTY FOR FLEET MODERNISATION DECISIONS TO BE PREMISED UPON
The Business Aircraft Operators’ Association (BAOA) is hopeful in this regard; but is facing an uphill task in bringing to the Indian establishment the realisation that business aviation is a contributor to national economic growth, a fact acknowledged by United States and Europe. Time saving, flexibility of use at short notice, timings of one’s choice and privacy during travel, are all factors that can be perceived to enhance productivity. However, visualisation of a business aircraft as a productivity enhancing tool has so far evaded the government which appears to be apathetic to the stridently and frequently voiced grievances of the business aviation community. The general sentiment (achche din) associated with Narendra Modi’s governance is yet to bring about either an increase in the demand for business aviation or an alleviation of the sorry state of existing business aviation industry. Fleet modernisation is thus not a very high priority in India.
The concept of fractional ownership could have encouraged entrepreneurship in business aviation; but, unfortunately, the Indian Government has so far not seen the merit of the model. One possible reason for this was that the Directorate General of Civil Aviation (DGCA) wants to be certain of attribution of responsibility in case of an offence related to the use of that aircraft. Fractional ownership holds the obvious advantage for a business house in that it can avail of depreciation benefits in respect of the fraction of the cost it bears every financial year, provided it owns the aircraft asset or part of it. Should fractional ownership be permitted, it could boost business aircraft purchases.
Trends in Aircraft
Meanwhile, new technologies are producing newer aircraft models with improved speeds, interiors and avionics to maximise the benefits a business aircraft offers. This section is not intended to be a full inventory of business aircraft available in the market but rather a glimpse of recent trends that complement established and existing options. If one’s primary consideration is speed, one would prima facie look at a jet. Speed is predicated to size; the bigger the business jet, the higher its speed. The supersonic range currently remains confined to military aircraft. A Super Sonic Business Jet (SSBJ), designed to travel at speeds above the speed of sound, remains a tantalising target for aircraft manufacturers. No SSBJs are currently available, although several manufacturers are working on designs. According to sources, Aerion SBJ, Aerion AS2, HyperMach SonicStar, SAI Quiet Supersonic Transport, Spike S-512, Sukhoi- Gulfstream S-21 and Tupolev Tu-444 are some designs in different stages of fruition and the business aviation world awaits the first SSBJ with expectation of delight and apprehension of its price tag!
Last year, Dassault’s Falcon 2000LXS achieved the distinction of being the first business jet to fly an instrument approach procedure (IAP) with a published LPV minima of 200 feet. Meanwhile, Dassault’s Falcon 8X ultra long range business jet, derived from Falcon 7X, has received approval from the US Federal Aviation Administration (FAA) as well as the European Aviation Safety Agency (EASA) and is expected to enter service later this year. The 6,450-nm range Falcon 8X will provide the greatest range and longest cabin of any Falcon family aircraft. Embraer did very well at the last Farnborough International Airshow (FIA) especially in terms of sales of its E190-E2. Orders now stand at 272 firm and 398 options. During FIA, Embraer displayed the Legacy 500 and also announced that its new Legacy 450 had received FAA certification for an extended range of 2,904 nm up from 2,575 nm, thus giving it full transcontinental range. Its Phenom 300 has made a place in the light-jet category and compares very well with other jets in that class. It also enjoys popularity on account of its highest resale value in the light jet class.
Gulfstream meanwhile has introduced innovative technology by adapting fly-bywire technology to the next level of intelligence-by-wire system which is now standard fit in the new version of G500 and G600 aircraft; the former is expected to replace the G450 as a product. The company claims that intelligence-by-wire uses half the components of a traditional FBW architecture for improved production quality and maintainability which also translates into lower weight and higher fuel-efficiency. Bombardier displayed CS100, Q400 and CRJ1000 at Farnborough, but did not conclude any deal during the show.
Honda Aircraft Company has received its production certificate from FAA in July this year and is building the HA-420 HondaJet, an advanced light jet which is touted as the fastest, highest-flying, quietest and most fuel-efficient jet in its class. The HondaJet incorporates several technological innovations in aviation design, including the unique over-the-wing engine mount configuration that dramatically improves performance and fuel efficiency by reducing aerodynamic drag while reducing cabin noise. HondaJet received its FAA Type Certification last December. The first Pilatus jet, PC-24, deserves a mention here as a short take-off and landing aircraft with a ceiling of 45,000 feet. Certification is expected in 2017 with service entry soon after.
Coming to turboprop aircraft, Epic Aircraft E1000 single engine turboprop is expected to be certified later last year. It has a carbon fibre airframe, and a maximum cruise speed of 325 kts TAS and a 1,650 nm maximum range at long-range cruise. Piper’s M600 single-engine turboprop, a derivative of the M500 (earlier Meridian) fitted with a new and larger wing that carries more fuel, an up-rated engine and G3000 avionics, is also a new entrant in the market. The Pilatus PC-12NG is also now available in its third iteration with an improved propeller, reduced drag, five kts higher cruise speed and 10 per cent quicker climb to cruising altitude, among other improved features. At the Oshkosh Show, Textron Aviation unveiled the Cessna Denali singleengine turboprop which is expected to make its first flight in 2018 and is being projected as the future leader in its class.
In the piston engine category, Mooney is introducing the normally aspirated Ovation Ultra and turbo-charged Acclaim Ultra. These new models have modified moly steel tube fuselage structures, composite fuselage skins and left and right side doors, both of which are wider than the single right door of older models for easier access.
Fleet Modernisation Strategies
Essentially, the business model of an aircraft operator dictates the choice of aircraft. This logic applies to fleet modernisation as well. The essential and desirable criteria are dictated by the simple question of what is the modernisation being undertaken for. The preliminary aspects to consider are whether the operations are only domestic or include international trips, the average length of a typical trip, the number of passengers usually carried and the user’s perceived premium on time. A good guide for making a coarse selection of candidates is business and commercial aviation (published by Aviation Week) which, once a year, usually in the May issue, gives out a Purchase Planning Handbook for Business Airplanes. For details one could also access the Conklin and de Deckers site. Once these are sorted out and some aircraft shortlisted, the engineering and maintenance related issues need to be considered. These relate to decision between buying a pre-owned aircraft or new, calendar time/flying time to next major servicing, any past accidents sullying the maintenance record of the aircraft being considered and so on.
IN INDIA, THE FLEET MODERNISATION DECISION IS NOT BASED ENTIRELY ON OPERATIONAL AND MAINTENANCE CONSIDERATIONS, BUT RATHER SMOTHERED BY REGULATORY AND FINANCIAL ONES
A dynamic business aircraft operator is constantly looking at fleet modernisation by evaluating newer aircraft and newer avionics for its existing fleet against its evolving business model. In India, the fleet modernisation decision is not based entirely on operational and maintenance considerations, but rather smothered by regulatory and financial ones.
General aviation, including business aviation, continues to be the worst afflicted out of all segments of Indian civil aviation. Most regulatory framework is essentially tailored for airlines and then by and large, unsatisfactorily adapted for applicability to general aviation. Another regulatory issue is that the systems in place in the DGCA and Bureau of Civil Aviation Security (BCAS), the two organisations that every aircraft operator must deal with regularly, are old-fashioned and bureaucratic. Files move laboriously from desk to desk in this age where information and communication technologies have coalesced to provide instant solutions to information interchange. Prime Minister Modi’s e-governance has so far missed out civil aviation. If a business house decides to buy an aircraft from a foreign agency, he has to wade through 10 different agencies and wait for about 18 months before the aircraft is available to him in India. Similarly, routine clearances and renewals, for example, pilot’s flying licence, which can be processed electronically to check if the prescribed requirements are met, are processed in multiple hard copies with many a slip before final approval. There have been reports about some of the processes having gone online commencing June 2016 and it is hoped that woes of business aircraft operators will reduce by this much needed and inordinately delayed reform.
Rationalisation and optimisation of regulations for general aviation would provide a degree of certainty for fleet modernisation decisions to be premised upon. There are other factors too that inhibit fleet modernisation decisions and cause dilemmas and uncertainties. The infrastructure is not friendly to business aviation, fuel costs are extortionately high, taxation and fee regimes are oppressive, private airports are cruelly autocratic in their approach towards general aviation, Maintenance, repair and overhaul processes are time-consuming and expensive, permissions to fly abroad are neither easy nor streamlined and rotary-wing operations are conducted under especially disquieting operating conditions.
Another issue that never ceases to amaze foreign agencies is that any general aviation operator wanting to import a new type of aircraft has to bear the financial burden of training a team of DGCA officials, a hefty investment that the operator has no return or use from and should rightly be the responsibility of the regulator as it owns the task of oversight of all operations. At the stage where a business aircraft operator wanting to modernise his fleet reaches the decision that a new aircraft into the market is what meets his requirement optimally, he would have to take into consideration this additional expenditure. To summarise, there are many things needing change in the environment for business aviation in India which constrain business fleet modernisation. Business aviation had hoped that the new civil aviation policy would remedy some of these impediments for more prosperous business aviation. Unfortunately, that has not happened as no relief is evident from the policy for that class of aviation.
Although airlines the world over are endeavouring to reduce the gap between business aircraft travel and business class airline travel, some of the inherent advantages of owning and operating a business aircraft would endure beyond the affordability factor. On the other hand, some of the traditional advantages of owning a business aircraft elsewhere in the world are repressed in India due to the existing regulatory mechanisms. BAOA has been spearheading a campaign for setting up of a Joint Working Group comprising the Airports Authority of India, DGCA and BCAS officials along with industry experts from BAOA to go into the problems of general aviation including business aviation. It is for the government to recognise the value of business aviation, acquiesce to its reasonable demands and facilitate the enactment of a regime that encourages the modest fleets of Indian business aircraft operators to be modernised to the best of international standards.