What Makes Business Aviation Successful?

Business Aviation refers to the deployment of aircraft on non-military and non-scheduled flights. The success of Business Aviation depends upon the infrastructure available to operate aircraft, reasonable regulations, marketing strategies, prudent operational planning, skilling human resources and easy financing. These aspects have a profound effect on the success of Business Aviation.

REGULATIONS

The Indian aviation sector is highly regulated to prevent accidents and to ensure operational discipline for flight safety. In order to provide economic buoyancy, certain archaic regulations need to be eliminated and others have to be made more user-friendly. Import duties and sanctions on acquisition of aircraft have to be reviewed. The current mindset of considering aircraft as a rich man’s privilege by the regulatory authorities does not augur well for Business Aviation. Today, executives who fly to remote areas using business aircraft realise the value of time and the effectiveness and efficiency it brings with it. This is only possible if the regulations are relaxed.

Aircraft import regulations have to be simplified. The process for filing flight plans have to be automated so that even if a fleeting opportunity emerges; the Business Aviation owner can capitalise on it by providing convenience to the passengers through quick and user-friendly service to ensure repeat sales. The flight plan, itinerary documentation and sanctions should be automated by designating civilian flight routes in the hinterland having minimal flight restrictions. This will enable the Business Aviation companies to offer customised itineraries at short notice. Areas where security issues arise, sanctions to itineraries can be manually processed.

The rigorous inspection schedules of aircraft need to be simplified to provide flexibility in operations. The procedure for registration, leasing and establishment of joint ventures of Business Aviation assets have to be made more user friendly. Disposal areas should be earmarked by the government where aircraft can be salvaged once these platforms lose their utility. India can also think of opening a decommissioning sector for Business Aviation assets, just as ships are disposed off in Alang in Gujarat. This will fuel a bustling market for cheaper pre-used components of aircraft and also provide actual machines on which trainee pilots and other crew can carry out training.

INFRASTRUCTURE

Business Aviation requires considerable ground handling infrastructure. Companies specialising in providing ground handling services such as aircraft loading, sanitation, provisioning of food onboard, checkin facilities, have to be available even at smaller airports to support Business Aviation operations as it is not feasible for Business Aviation operators to maintain a dedicated infrastructure and staff to capitalise on sudden windows of opportunity that may arise. Consequently, third party organisations will have to provide such services at all airports.

All airports need to have an Instrument Landing System, metrological stations, navigation beacons and control tower technologies that are compatible with the avionics installed on modern aircraft to enable these aircraft to fly unhindered. Similarly, infrastructure beyond the airport such as hospitality services, surface transportation, logistics and skilled human resources also need to be available so that Business Aviation operations become meaningful by enabling the patrons to use the aircraft as a means to an end, be it for business or leisure. In the event of infrastructure beyond the airport not being accessible, even Business Aviation assets will remain un-utilised. Hence, both the government and the private sector have to develop infrastructure beyond the airports so that people have a purpose of flying into different and remote areas using Business Aviation assets.

OPERATIONS

Business Aviation owners should be permitted flexibility for quick pooling of resources or disposal of the same as per the changing socioeconomic and business scenarios. This is to cater for the seasonal, regional and economic demand surges of idle aircraft in the country. Idle inventory eats into the economic resources of a company. Aircraft parking tariffs, landing charges and airport entry charges for repairs have to be optimised. It is expensive to keep an aircraft on the ground. Hence, additional parking space needs to be created by way of underground hangers where multiple small Business Jets can be parked to reduce the costs. The capital investment on these has to be amortised over decades to reduce parking charges.

MRO companies need to be encouraged to set up shops around airports. This will reduce the cost of repairs, maintenance, reduce inventory holding costs, ensure stocking of spares, oil and lubricants. An aviation waste collection and disposal venture for removal of used parts, oils in a eco-friendly manner can be carried out which will lower the maintenance and operating costs. A cluster of all these facilities acts as a magnet to attract a pool of talented people and thus reduces cost of operations.

MARKETING

Business Aviation companies market their services through direct selling. As a result, there could be opportunities wherein the full capacity of an aircraft may not be fully utilised. In such cases, there exists the opportunity for an aggregator of Business Aviation seats/loads to resell vacant space as per the itinerary compatibility to other potential fliers, of course with the permission of the prime customer of that itinerary. Information of such vacancies could be disseminated on websites where any potential flyer can spot an opportunity.

Business Aviation is a great enabler for economic development

If vacancies are purchased, the surplus revenue can be returned as a subsidy to the prime traveler of that itinerary. This will also increase the revenues of a Business Aviation company by this additional sale and the full capacity utilisation. The extra patrons will also lessen the per passenger cost of ground infrastructure usage. This benefit can be passed onto the patrons or increase the profitability of the company. Such a venture can either be started by a private entity or by even Pawan Hans Helicopters Limited as they have the highest number of aircraft with them. This will be a win-win situation for all. The service aggregator receives a commission. The aviation owner gets incremental revenues, the primary passengers will get cheaper passage and the sharing passenger will get to fly at lower cost.

FINANCIAL ASPECTS

An aircraft is an expensive purchase usually involving 10 to 15 years of repayment options. Consequently, financial institutions have to provide funds at lower interest rate to popularise Business Aviation and to ensure an early break-even point to minimise business risks. Finance and leasing companies have to creatively offer ‘Buy and Lease Back’ arrangements and fractional ownership. They should source private equity and build enough credibility to attract liquid financial resources from other sectors. This will reduce the cost of borrowing. This is only possible if highly skilled financial professionals with proven credibility are available in the field of aviation finance.

HUMAN RESOURCES

Pilots and technicians are highly professional employees and seldom make mistakes. However, the ground handling staff is the face of the company as they are the ones who handle baggage at check-in and check-out. As a result, service consciousness of ground handling staff has to be impeccable. They become the face of the company when a damaged baggage is delivered to the patron. The sales staff or at the check-in counter, people have simply to be the best or the goodwill of the Business Aviation company is lost irretrievably.

Fortunately, the Government of India has embarked upon an excellent Aerospace and Aviation Sector Skill Council programme where a comprehensive 360 degree training to ground handling staff is imparted in a structured manner. This is a very good step because most of the ground staff hail from poor sections of the society where perfectionism is unknown. Carelessness in handling other people’s assets is a norm for them. This skill development programme will improve the attitude and skills of the ground handling staff including technicians. It will reduce losses due to material wastage, loss of customers due to rude behaviour, help build brand goodwill and popularise Business Aviation and aid customer retention.

Business Aviation is a great enabler for economic development. It, however, needs to have a considerable infrastructure around it both human and material so that patrons use it to fly to destinations with a larger purpose in mind, be it for leisure or business. It is heartening to see the enhancement of Business Aviation assets and the initiative taken by the government to enhance aviation infrastructure both material and human to ensure ascendency in the Business Aviation sector.