The first-ever Aero Expo, organised by the PHD Chamber of Commerce and Industry, was held in Delhi over two days which saw a slew of intense discussions on the future of aviation, particularly regional aviation. Setting the tone for the two-day conference was the Union Minister of Civil Aviation, P. Ashok Gajapathi Raju. Also present at the inaugural were the Minister of State for Civil Aviation, Jayant Sinha, and the Minister from Ireland for Employment and Small Business, Pat Breen.

The Civil Aviation Minister reassured the Indian civil aviation industry, emphasising that the government of the day is exploring all possibilities for capacity expansion of leading airports in the country as well doing its best to make sure that the regional air connectivity is accomplished as per its UDAN (Ude Desh ka Aam Naagrik) initiative. The domestic aviation sector is on the ‘upswing’ and is at an inflection point. “We are working to connect unconnected and serve unserved.”

The Minister also stressed that though the domestic civil aviation industry has been growing at a rate of more than 20 per cent in the last few years, higher passenger growth in civil aviation sector is still a challenge for the government which could be won with addition of capacities in India’s leading airports. “We are taking all possible steps in making India the third largest aviation market,” he added. Also complimenting the organisers of Aero Expo 2016, he said: “This is a commendable initiative and should happen every year.”

The Minister of State Jayant Sinha asked civil aviation industry to grow in such a manner so that its passenger traffic, currently estimated at about 150 million for domestic and overseas sector multiplies manifold and catches up with the air traffic growth of China which presently is calculated at 500 million per annum. The ministry, he mentioned, had adopted a three-pronged strategy under its UDAN initiative – expansion of airport capacities; ensuring regional connectivity and equipping the passenger with better level of satisfaction and experience under its Air Sewa initiative.

Dozen schedule commercial operations soon

The Secretary of Civil Aviation Rajiv Nayan Choubey reiterated the government’s commitment for higher growth of civil aviation sector with all possible government’s initiatives in a spirit of partnership, adding that by December 2016 a dozen of schedule commercial operations could begin to connect small towns in the country under its regional connectivity drive. The priorities were regional air connectivity, ensuring air travel is comfortable and convenient, and expanding airport capacities. Domestic aviation sector is expected to see more than 20 per cent growth in the next three years which also poses challenges. “We have to be ahead of the growth curve,” he added. According to him, the 23 per cent growth seen in the domestic aviation sector, which is also highest in the world, is “not a flash in the pan”.

The Irish Minister, Pat Breen, emphasised that India and Ireland should have stronger partnership to expand India’s civil aviation sector as Ireland is one of the global leaders in this sector, particularly in aviation leasing. Appreciating the event, Breen said that it was a hit show and Ireland looks forward to it every year.

The Chairman of the Civil Aviation Committee, PHD Chamber, K. Narayana Rao, proposed that the civil aviation sector should be brought under priority lending scheme of the government, especially for acquiring smaller aircraft for enhanced regional air connectivity. The Co-Chairman of the Civil Aviation Committee and CEO of Club One Air, Bhupesh Joshi, along with Secretary General and Director of the Chamber Saurabh Sanyal were also present on the occasion in which a knowledge report by Auctus Advisors was released and an MoU was signed between FSTC Simulators and ATR, turboprop manufacturers. The vote of thanks for the inaugural session was by Bhupesh Joshi.

The general aviation and business aviation segment is keenly watching how the Regional Connectivity Scheme (RCS) will evolve in due course as its future is interconnected. The heartening aspect was that there were a number of business aviation and general aviation players with the Business Aircraft Operators Association (BAOA) as one of the co-associates of the conference. Arrow Aircraft’s Rohit Kapur and former President of BAOA was very vocal about regional connectivity and the potential for business and general aviation operators. The event was supported by GMR, Gyrox, Execujet Avaition Group, Pawan Hans, Airports Authority of India, Air India, Zoom Air, Airbus Helicopters, ATR, Embraer Commercial Aviation, Airawat, Club One Air, Arrow Aircraft, FSTC Simulators, Continental Carriers and a few others.

There were a number of exhibitors who drew attention and they included Arrow Aircraft, Gyrox Aviation, FSTC and Club One Air. Arrow Aircraft who had recently launched the Viking Twin Otter Series 400 in India, was showcasing the aircraft which is suitable for remote connectivity, seaplane operations and special missions. This is going to be a game changer as far as coastal surveillance, remote connectivity and other aviation related activities are concerned. Arrow Aircraft is the only authorised sales representative for Gulfstream in India and also for Jet Aviation, MRO which is based in different countries. Arrow Aircraft is into air charters, aircraft management, aircraft acquisitions and appraisals. Club One Air is one of India’s oldest and largest air charter company with extensive aviation experience offering world class services and owns a fleet of jets that cater to corporate India and individuals with exclusive taste. Bhupesh Joshi, CEO of the company was one of the chief architect behind the organising of the Aero Expo show.

“WE ARE TAKING ALL POSSIBLE STEPS IN MAKING INDIA THE THIRD LARGEST AVIATION MARKET.”

— P. Ashok Gajapathi Raju, Union Minister of Civil Aviation

Airbus Helicopters talks about potential

The President of Airbus Helicopters (India) Xavier Hay said India with 270 odd helicopters was a market with low penetration, less than the number of helicopters either in Switzerland or Netherlands. The potential for growth in the next decade was huge, considering how the number of pilgrims to Kedarnath was on the rise. Tourism and other services would open up opportunities for helicopters which had substantial capital investment. Airbus, he said, would continue to grow its long-standing partnership with Pawan Hans which has a huge helicopter fleet.

VGF concerns

The Managing Director of BAOA, Captain R.K. Bali said the Viability Gap Funding (VGF) is a contentious issue and sought differential VGF based on the seating capacity of the aircraft, factoring in the 10 to 20 seaters. The VGF of Rs. 4,270 for one hour flight was not realistic for a small aircraft. As regards permitting self ground-handling, the non-scheduled operators can be ‘testing ground’ in the scheme. However, he underlined that the intent of the ministry was appreciated, it was shortfalls in implementation which could derail any initiative.

Leasing options

The panel discussion on leasing chaired by Bhupesh Joshi of Club One Air dwelled at length on how to navigate the complicated waters of leasing, muddied by Kingfisher Airlines. Joshi mentioned the meaningful discussions industry professionals had with the delegation from Ireland which has many aircraft leasing companies. Getting an aircraft on lease, particularly in general aviation, is a major issue.

Uday Naidu said one concern in the sector, particularly in aircraft acquisition and maintenance, is the issue of GST (goods and services tax) which may be detrimental to the aviation sector where aircraft and aircraft parts are mostly imported.

Nanda Kumar said aviation leasing was basically a technofinancial-legal contract and it is skewed in favour of the lessor. The lessee has to fight his way out in the deal and unless one is well-versed with the leasing business, the chances of a person losing heavily was high. Lessees, he suggested, should go for six years to 12 years leasing as it would not only give better rates, but also help in knowing what direction the company is heading.

Skill development opportunities

In the session on skill development, Naidu said that one lakh skilled technicians were required in the next five years, considering the massive induction of aircraft that is likely to happen in India. Presently, the quality of training of maintenance engineers and other staff was not good and students who graduated from the many institutions needed further training on the job.

P.S. Nair said that the sector which employs one million directly and 3 million indirectly, would require a huge number of highly skilled persons in the near future. The skill gap would further widen by 2035, if measures were not initiated now.

It was felt that training currently being imparted for prospective civil aviation human resource and personnel are substandard and needed significant improvements for their sustained employment to effectively serve the passenger and cargo services of the civil aviation sector. Since investments in such training institutes are meagre, the equipment and other facilities in them are not up to the mark to provide training and skills that are required for coming times in aviation. It was also recommended for the government to open a series of training and skills institutions for growth of the domestic civil aviation and its effective operations on lines of the Indian Institutes of Technology and Indian Institutes of Management.

Vikas Khanna of FSTC said his company was a one-stop-shop for training of cabin crew and other airline and airport staff. The company had imparted training to 8,500 flight crew in less than one year, reflecting the trust that airlines in India have on FSTC. He mentioned that FSTC had tied up with ATR with regard to training of personnel.

Colonel Rampal Suhag, Chairman and Managing Director of Gyrox Aviation, presented the Gyroplane which when approved by the DGCA has the possibility of becoming a mode of transportation for the rich class. The Gyroplane is a twin-seater aircraft which can take-off with just 100-metre runaway and runs on high octane and costs less than Rs. 2 crore. Gyrox Aviation displayed the new aircraft which caught the attention of the public.

The two-day event concluded with felicitating industry leaders in various categories such as Lifetime Achievement Award in Aviation—G.M. Rao of GMR Group; Aviator in Public Service—Rajiv Pratap Rudy, Minister of State (IC), Ministry of Skill Development and Entrepreneurship; Turnaround Turk in Aviation (Public Sector)—Ashwani Lohani, CMD, Air India; Largest Aviation Operator- Offshore & North East—Pawan H ans; Exemplary Greenfield Initiatives in Aviation—Airports Authority of India; and Significant State Contribution towards Aviation – Gujarat.

20 AIRLINES ALREADY IN FOR BIDDING PROCESS IN RCS: JOINT SECRETARY, MINISTRY OF CIVIL AVIATION

 

Usha Padhee

The Joint Secretary of the Ministry of Civil Aviation, Usha Padhee, in her address said that 20 airlines had registered for the bidding process under the Regional Connectivity Scheme (RCS) for various concessions including Viability Gap Funding (VGF). She was hopeful that many more airlines would participate in the scheme which termed it as an ‘enabler’.

Stating that the scheme may not fit into the business plan of each and everyone, she said, it gave a broad framework as per which it may work for some, may not work for others. However, the Ministry, from the Minister of Civil Aviation downwards, was working to ensure that the National Civil Aviation Policy of which the RCS was a central theme, would thrive. It will take into account the issue of affordability for passengers, while it will address the issue of viability for operators. The policy will directly benefit the sector and in the broader sense it will address the issue of economy and growth, as smaller towns will be linked to big cities.

The Ministry has created the framework at the national level and it was now for the states to get their act together.

She conceded that there are many challenges and regulatory was one of them. The scheme, she reiterated, was to attract operators, make it viable for them, to be win-win. In discussions with stakeholders the recurring theme, she said, was about regulatory hurdles and the operators have been asking for simplification of rules. “They are saying, don’t give us VGF, make our life easy. These discussions with stakeholders is quite revealing.”

The VGF is for three years, but the sunset scheme is for 10 years. Such a model is not just specific to India, but many countries too have different models, it could be in the form of VGF or some other assistance. It is essential to connect regional areas and for that some support from the government is required.

The Ministry understands what the stakeholders are facing and has started showing a sense of urgency to address their issues. “This is the time to rise to the occasion. We won’t say we have done a great thing or we are going to do a great thing. But we believe this is the time which can bring about transformation in the sector, everything is falling in place.”

—By R. Chandrakanth