Supporting National Economy

The National Business Aviation Association of the United States (US) defines Business Aviation as the deployment of any aircraft which is neither on a military nor on a scheduled flight. It flies as per the timings and itinerary of a customer’s choosing. Business Aviation provides economic ascendancy to the society by infusing efficiency in trade across geographically remote areas. It has a direct, indirect and induced economic impact on our country.

DIRECT ECONOMIC IMPACT

Business Aviation provides a direct economic impetus by creating jobs and galvanizing commercial activity. Direct financial contributions include investment in manpower, machinery, technology and raw material for aircraft manufacturing. It provides economic opportunities to workers, designers, engineers and suppliers of factors of production. Operational revenue generated from business aircraft enable payment of salaries, fuel procurement and funding the maintenance, repair and overhaul activities apart from paying airport charges and taxes that add to the nation’s GDP.

As of October 2018, data available on the website of the DGCA, India has got a total of 338 non-scheduled flying machines including 47 helicopters of Pawan Hans. Each machine on an average, provides direct employment to at least eight people of assorted categories. The Cost To Company (CTC) for each employee is a minimum of 1,00,000 per month. As a result, direct compensation in itself amounts to and contributes a minimum of 325 crore to the nation’s GDP. At least 35 per cent of this amount comes back to the government coffers as income tax, tax saving investments and GST on the consumption of goods and services by these employees. This constitutes direct earnings. Aircraft operating finances are in addition to these figures and are much higher. The income generated by tertiary services providers such as hotels, airline ticketing and taxis generate indirect income. Hence, one can easily understand the tremendous impact of just 338 aircraft on the nation’s GDP and the employment of technically qualified personnel.

INDIRECT ECONOMIC IMPACT

Indirect income is generated for people who either use business aviation to further their own business or those who provide ancillary services for operation of aircraft. These include logisticians, hospitality providers, training establishments, conference facilitators and even Research and Development cum providers of testing facilities that support aircraft operations from the cradle to the grave. Business Aviation acts as a subtle and effective catalyst to enhance employee productivity and reduces his inefficiencies. These factors are difficult to quantify but can be easily comprehended as they are enumerated in the subsequent paragraphs.

Business Aviation is best exploited through itineraries connecting remote areas or as fringe elements serving the hub-and-spoke model. A hub is an airport which is served by scheduled flights from multiple directions. Delhi is one such example. Spokes are short haul flights that emanate from the hubs and terminate at remote locations or vice versa. This brings miscibility between people and areas that are segmented on the basis of their economic assets, resources, geographic inaccessibility, technical threshold level variance amongst people and insurgency.

Business Aviation connects these disparate regions. It flies in key decision makers and skilled technicians to solve issues. Thus, it facilitates the removal of financial, human and resource imbalance in different regions. These experts open avenues of economic and social development in backward areas and help spur manufacturing through optimal utilisation of resources.

Business Aviation provides a direct economic impetus by creating jobs and galvanizing commercial activity

Raw materials in remote areas lie unexploited due to inaccessibility of skilled manpower, logistics and inaccessibility of key decision makers. All these lead to poverty in the region. Business Aviation enables these experts to travel quickly to these remote areas and carry out spot decision-making in the best economic interest of all stakeholders. Odisha is rich in natural resources but has limited accessibility. Hence, executives/experts cannot reach these points of action. In such cases, the executives would utilise business aircraft to fly to the nearest airport at their convenience to seize the window of financial opportunity and return to base to concentrate on other tasks. This saves time, minimises travel-related stress, optimises their output and enables executives to take better decisions to enhance own business. Thus, when an executive has to visit multiple places; tailor-made itineraries through Business Aviation will facilitate effectiveness, efficiency and time optimisation for the executive thus, enhancing his financial contribution to his company. A commuter spends a minimum of ninety minutes per airport between check in, boarding and exit. Time can be saved by using a business aircraft vis-á-vis a scheduled airline. Now, imagine the time saved on a multiple leg itinerary!

In case more time is needed to resolve an issue, an executive can extend his stay because he knows that he has a business aircraft at his disposal. Itinerary customisation/extension is impossible with a scheduled airline. Moreover, upon completion of work, executives may return home or attend to other pending work saving on other logistical expenses too. All these aspects aided by good decision making, alertness of executives and financial aspects indirectly add to the organisation’s revenue. Thus, Business Aviation minimises loss of an executive’s productivity due to non-congenial work-related travel environment.

For executives travelling in groups, it makes good business sense to hire a business aircraft rather than expend monies on business class tickets. Business aircraft also offer a private and comfortable environment where executives can discuss their plans in complete security at 30,000 feet. The seating in business aircraft enables face to face communication which is not possible in a commercial airliner. Where security is of paramount importance, high value goods and proprietary software can be carried by executives with ease.

Stress develops when commuters travel amidst unknown people and executives cannot work freely in the lounges. Unreasonable behavior of co-passengers too is cause for irritation. Business Aviation eliminates all this and ensures that executives save time by not waiting for connecting flights between different legs of their itinerary vis-á-vis a scheduled flight. Usually, business aircraft need shorter runways. Hence, British-era landing strips are being reactivated under the UDAN scheme to enable human logistics. Moreover smaller airports usually do not suffer from disruptive agitations. Thus, they insulate corporate organisations and executives from unscheduled strikes of commercial airline staff or city transport service and avoid Black Swan type losses.

INDUCED ECONOMIC DEVELOPMENT

Induced economic development occurs when either the business aviation people spend their salaries in the market or enable others to reach remote locations where they can invest. In either case, this money is pumped into the local economy. Fringe area connectivity ushers in economic prosperity in neglected areas. Hence, the local population is less likely to be radicalised thus, enhancing stability and economic activity in these regions. It also provides access to air ambulatory services and quick mobilisation of disaster management personnel.

Aircraft manufacturing requires technical manpower. Once this staff retires, many of them settle down where they have spent their working life. Usually, technical people ensure that their children get better educated than them. Consequently, the technical knowledge level of that area rises attracting more Research and Development related activities, technical ventures and jobs in that area which improves the regional GDP. Bengaluru and Chandigarh are classic examples of this.

During major isolated events such as Aero India or the Kumbh Mela, there is a surge in the requirement of aviation assets. Scheduled airlines may not be able to muster adequate resources; Business Aviation can provide services and earn profits thereby fuelling local economic growth. This spurs the need for ancillary services to keep the aircraft serviceable through catering services, testing facilities and repair and maintenance. Business Aviation is a great leveler of economic wealth as it initiates commercial development in backward areas by opening up inaccessible areas and factors of production for entrepreneurs. Hence, Business Aviation provides employment to trained manpower and facilitates great financial contribution to the exchequer thereby becoming a great socio-economic leveler of the nation.