New Minister Poised to Lead Growth

Business aviation in India is witnessing not just a sunshine period, but a period of glamour, glitz and gaze (from all over the world). The recently held, ‘wedding of the century’ – The Ambani wedding saw a flurry of jets zooming all over Mumbai for almost a week. Reports suggest that Mukesh Ambani had arranged a fleet of 100 planes, including three Falcon 2000 Jets from Club One Air for the elite guests. The guests had come from all over the world and naturally each aircraft had to make multiple trips across the country. The above number shows the sheer demand of business aviation in India, and it is only set to grow from here. Now with the upcoming elections across various states in India, it is little surprise if you don’t see a charter flight zooming from your window ledge. All said and done, the business is booming, clients are happy and the private charter companies are happier.

Business aviation has always been a cornerstone of India’s aviation sector. While often synonymous with luxury, it serves as an indispensable tool for economic leaders, playing a crucial role in driving the country’s growth. Time could not have been more right for the New Minister of Civil Aviation to take charge and address the concerns of business aviation fraternity. The new Civil Aviation Minister under the Modi 3.0 governance took to office on June 10, 2024. Experts are of the opinion that the sooner or later the business aviation sector is bound to attract the minister’s keen eye.

“With the new Minister of Civil Aviation at the helm, there are heightened expectations for the new government council to catalyse monumental growth and to successfully navigate the formidable challenges and complexities that have characterised the past decade,” anticipates Sadaf Herekar, Executive Director, Plexus Aviation.

THE INDIAN BUSINESS AVIATION INDUSTRY IS FINALLY TAKING OFF, WITH GROWTH IN BUSINESS JET FLEET SIZE INCREASING FROM 1-2 PER CENT BETWEEN 2010 TO 2021, TO 10-12 PER CENT FROM 2022 ONWARDS

Echoing Herekar’s thoughts, Atiesh Mishra, Founder and Director of AJM Jet Management goes on to add “The Indian business aviation industry is finally taking off which was much awaited,” he further goes on to explain the growth rate with some statistics. “Since 2010 to 2021 the growth rate was only a marginal 1-2 per cent business jet fleet between 140-142 Jets. From 2022 we have seen an increase in growth rate to 10-12 per cent in terms of business jet fleet size it is currently at 164 Jets,” Mishra states. To add to this, Arun Kashyap, Founder and Promoter of newly launched Sirius Aviation says, “General aviation and private business jets constitute a smaller portion about, less than five per cent of the overall commercial aviation activity in India.”

REGULATORY REFORMS AND SIMPLIFICATION

According to Kashyap, government policies and regulations primarily focus on the mass consumer market and scheduled commercial airlines. “However, the private business jet segment has been thriving, driven by demand from high-net-worth individuals (HNIs), NRIs, and corporate leaders,” Kashyap adds.

One of first and foremost expectation of the business aviation fraternity in India from the new MoCA is streamlining the taxes and various policies and reforms that are stuck in red-tape. Herekar urges the new minister to implement tax incentives and reduce duties on aircraft imports and maintenance, making it more financially viable to operate and maintain private charters in India. Further adding on to this point Mishra states “The Minister should consider reduction in GST applicable on business aircraft charter. This is required to create a level playing field with international charter operators.”

Another one of the most crucial aspects of business aviation is the approval and licensing process that takes days, dragging into weeks and sometimes even months leading to frustration among both private charter companies as well as clients. Herekar further hopes that the new minister will soon simplify and expediate the approval and licencing processes for private charter operations to reduce bureaucratic delays and enhance operational efficiency. She further elaborates on providing clear and consistent regulations for private charter services, ensuring that rules are transparent and easy to navigate.

Interestingly Rajan Mehra, Chief Executive, Club One Air expects the Minister to look into a matter that’s not entirely in his control. “If the new minister can put enough pressure on the Oil minister, Finance minister and States (because the States are a stakeholder) to bring fuel under GST, that would be his biggest achievement.”

STREAMLINING TAXES, POLICIES, AND REGULATORY PROCESSES, INCLUDING SIMPLIFYING APPROVAL AND LICENSING, IS A KEY EXPECTATION FROM THE BUSINESS AVIATION FRATERNITY FOR THE NEW MINISTER OF CIVIL AVIATION

Lovejeet Singh, Partner, Corporate & Aviation at Chandhiok & Mahajan has urged the Minister to consider full implementation of Cape Town Convention. Although October 3, 2023 notification was issued to give comfort to lessors when it comes to re-possession and it has also been tested in Go First case by the Delhi High Court, the lessors still want to see full implementation of Cape Town Convention. Singh also wants the new MoCA to speed up the implementation of fractional ownership policy. “The draft guidelines were issued a while back but the DGCA is yet to issue the final version,” Singh says. “The implementation of fractional ownership policy will be a boom for the private aviation,” Singh further adds. Supporting Singh’s statement Herekar also feels that the government should encourage ownership of aircraft and streamline management and operations.

Kashyap’s expectations are in the form of four-point plan for the ministry. They are:

• Increased Slot Availability: Ensuring a minimum of five slots per hour during peak traffic times would enhance operational flexibility.
• Streamlined Clearances: Implementing single-window time-bound clearances for non-scheduled permit services at the Directorate General of Civil Aviation (DGCA) and the Airport Authority of India (AAI) would expedite processes.
• Addressing Monopolistic Practices: Removing monopolistic practices at airports (such as Ground Handling Agencies and maintenance agencies) would promote fair competition.
• Alignment with International Standards: Streamlining policies in line with the European Union Aviation Safety Agency (EASA) and the Federal Aviation Administration (FAA) rules would enhance efficiency and safety.

Looking at the above four-points Kashyap feels that implementing thoughtful policy changes can further boost this sector and contribute to India’s emergence as a global leader in aviation.

Summing up the policy reforms, Herekar states that the minister should focus on policies that encourage the growth of the private charter sector, such as subsidies or grants for new operators and startups.

INFRASTRUCTURE DEVELOPMENT

Business Aviation is one of strong pillars of aviation and can actively lead to promoting the economy as well as employment generation. Hence as India’s largest general aviation operator, Mehra would like the minister to comprehend the crucial role played by business aviation. “Since GA is considered to be something for the rich and famous, several governments in power have hesitated to support our industry,” Mehra adds. This has led to high taxes for import of aircraft and MRO activity, least priority in assignment of slots, fuel and high charges of parking.

Echoing Mehra’s words, Herekar stresses the need to develop and improve dedicated infrastructure for private charters at major airports, including exclusive terminals, hangars, and parking spaces. She strongly urges the minister to actively promote the benefits of private charters as a viable and efficient mode of transport for business and leisure, encouraging both domestic and international demand.

Mehra further goes on to urge the ministry to promote the infrastructure in the country as a whole. “Currently the focus currently seems to be on the larger cities,” Mehra says. “Small business jets need to go to some very small towns where industrialists propose to build plants, factories etc and therefore Tier II and Tier III and even some remote locations must be given same priority as the large or medium sized towns,” Mehra urges.

Herekar also points out at the need of enhanced regional airport infrastructure to support private charter operations in underserved and remote areas, promoting connectivity and economic development.

THE BUSINESS AND GENERAL AVIATION SECTOR NEEDS THE SUPPORT OF FAVOURABLE GOVERNMENT POLICIES AND REGULATIONS TO ENSURE CONTINUED GROWTH. BUSINESS AVIATION HAS ALWAYS BEEN A CORNERSTONE OF INDIA’S AVIATION SECTOR AND SERVES AS AN INDISPENSABLE TOOL FOR ECONOMIC LEADERS, PLAYING A CRUCIAL ROLE IN DRIVING THE COUNTRY’S GROWTH.

TECHNOLOGY AND DIGITISATION

Meanwhile technology, digitisation and artificial intelligence have made its way into every aspect of our lives. Herekar further tries to draw the minister’s attention to the fact that many Indian airports are still lacking basic and essential amenities like automation in booking and ground handling to further streamline the operations. He feels that the overall air traffic management system must be enhanced to address the growing congestion, as it is urgently needed.

The current eGCA platform instituted for digitisation of processes at DGCA is limited to technical support by platform provider. Kumar goes on to explain this in details. “The platform does not offer required accountability or transparency of procedures to operators/personnel at DGCA,” Kumar adds. To further simply and stress his point, Kumar explains with the help of an example. “There’s no forum to raise concerns about approval delays against specified timelines, rejection of applications on differently interpreted reasons, or accountability on regressive regulations encountered in field,” Kumar adds. The processes like application for services, approvals, renewals thus remain as in yesteryears era of license raj. This leads to reasonable cost and efforts dragging both operators and personnel with adverse impact on national growth plan of aviation sector.

Kumar urges the minister to come up with an electronic platform that enables addressing concerns on process procrastination, application(s) rejection without sufficiently supported clauses, inordinate delay of entitled services and accountability for continuance of outdated regulations is very strongly recommended. “Since AAI functions closely with DGCA, the e-platform must include both DGCA and AAI matters,” Kumar suggests. He further wants the MoCA to consider audits at DGCA and AAI to include scrutiny of timelines, rejected applications and a review of representations made from field about regulations.

HELICOPTER SECTOR

Helicopters are one of the most essential parts of Business Aviation but unfortunately in India, it is a slightly neglected. However, towards the turn of the century, helicopters in India are seeing better days with both the government and stakeholders realising the importance of helicopters not just in transportation but overall business and economic growth of the country. Captain Peeush Kumar, Executive Pilot at Chipsan Aviation Private Limited, shares his perspective of the helicopter industry as a whole and places his demands before the new MoCA.

Kumar also throws light on development of an inclusive helicopter network for Regional Connectivity (RCS- UDAN) scheme. “sub-400 km sector of RCS UDAN has less than three per cent sustainability post- VGF period as reflected in CAG report,” Kumar states. “This sector length is the core competency of helicopter operations owing to their typical characteristics. Paradoxically, nationwide inclusivity of helicopter services to support RCS UDAN scheme is negligible. Enabling technology, though already available at Indian airports has eluded helipads. A national interest opportunity thus finds impediment due to an apprehensive approach for helicopter sector,” Kumar adds.

Kumar further goes on to explain that elaborate runways and associated paraphernalia necessitating large real estate and investments are not required for helipads. “For cost prudence and fruitful scheme implementation, RCS UDAN scheme must comprehensively deploy ‘helicopter’ specific sub-400 km segments under PBN (Performance Based Navigation) based helicopter operations. These operations can facilitate all weather/day-night operations and a robust feeder network for regional connectivity intended under the scheme. It must be known that said PBN based procedures have found extensive helicopter deployment especially in hilly terrain in the west,” Kumar explains.

Uninspiring footprint of Indian helicopter operations in relation to its land mass and population highlights an enormous scope of expansion. However, Kumar feels that the sector has remained straightjacketed in absence of facilities that can only be extended by AAI. Given perpetual priority to airline sector with much larger revenue statistics, helicopter sector has maintained status quo of past 25 years.

He urges AAI that with technological advancements enabling all weather day-night operations fruitfully deployed in the west, AAI must consider a separate section/directorate for helicopter growth as at DGCA. “This step would invite dedicated participation from AAI towards helicopter sector and an accountability in favour of national interest,” Kumar concludes.

CONCLUSION

And last but not the least comes Safety and Training. Herekar wants the MoCA to promote safety standards and provide support for training programmes to ensure that the sector maintains high levels of safety and service quality.

India is rapidly emerging as a global powerhouse, experiencing extraordinary economic growth. The nation’s recent economic achievements and promising future prospects are significantly enhancing its influence on both regional and international stages. As the economy flourishes, the aviation industry is also witnessing unprecedented growth, attracting significant international interest in the Indian market. Notably, there has been a trend where passengers who previously traveled in first-class cabins are now opting for private business jets. Airlines are adjusting by reducing first-class capacity and expanding business and premium economy offerings.

Considering all of the above, the expectations from the New Minister of Civil Aviation focus on fostering a supportive environment for the private charter sector to thrive, ensuring regulatory ease, infrastructural support, and policy initiatives that drive growth and development.