As infrastructure for charter business improves and liberalised regulations are in place, the segment will expand further. In India, the constraints are many, albeit getting unlocked at a slow pace as the policymakers are still in a world knotted in bureaucratic tangles.

Post-World War II, a surplus of aircraft saw the birth of air charter companies in Europe and the US, and over the years, air charter has evolved into a business tool for executives for whom ‘time is money’.

Air charter is the business of renting an entire aircraft as opposed to individual aircraft seats on a scheduled airline. While traditional airlines or scheduled operators are in the business of selling transportation by the seat, air charter companies or non-scheduled operators focus on individual private aircraft and itineraries, urgent on time-sensitive cargo, air ambulance and any other form of ad hoc air transportation.

The benefits of air charter operations are many. It avoids time-consuming departures/transfers at congested airports; reaches more airports than scheduled operators; ground services tagged along with charter service and often at an affordable price. Not to forget the choice of aircraft, although mostly the small aircraft.

The National Business Aviation Association (NBAA) has listed many benefits of private aircraft/charter service and they include saving employee time, increasing productivity en route, minimising non-business hours away from home, ensuring industrial security, maximising personal safety and peace of mind, exercising management control over efficient, reliable scheduling, projecting a positive corporate image, and charging the entrepreneurial spirit.

It is only in the last two decades that air charter, air taxi and corporate aviation have made tremendous strides and the segment is growing fast, riding on factors such as tourism; executive travel; high net worth individuals, etc. Across all markets, the shift is clear from the beginning when mostly large companies or only the wealthy invested in private jets. Now several companies have their own aircraft and there is a proliferation of business charter companies, thriving on the growth of executive and leisure travel.

Private jet manufacturers are gung-ho about the prospects of charter business and are making available aircraft to suit their business needs. As infrastructure for charter business improves and liberalised regulations are in place, the segment will expand further. In India the constraints are many, albeit getting unlocked at a slow pace as the policymakers are still in a world knotted in bureaucratic tangles.

Despite such system flaws, the growth of air charter business is moving north as there are many drivers. The NBAA in a report has stated that the foremost reason for the growth of charter operations has been the perception that there is increased productivity of personnel. Executives can conduct business en route in comfort and privacy. It is perceived that charters do reduce stress that is generally associated with travelling on scheduled airlines. Companies can now fly their executives on charter to destinations where scheduled airlines do not operate. Visits to company plants, offices, clients, offshore, etc can be done through charter aircraft as connectivity has become a key issue in expanding business operations. Smaller airports have facilitated such connectivity.

By using air charter, companies now have the ability and flexibility to choose any operator and the aircraft type to meet their business needs. It certainly is cost-efficient, but totally dependent on charter aircraft availability and the quality of the service provided. Many big multinational corporations and other conglomerates have their own aircraft, thus giving enormous control over operations, but this is highly capital intensive as it involves setting up a flight division, hiring professionals such as pilots, maintenance and flight planners, etc. Most multinational corporations (MNCs) go for a mix of flying their executives—fly them on company aircraft; use charter operators; and scheduled airlines.

The way business jet operations are growing; new models are evolving, one of which is aircraft management contract. It is a hybrid version of air charter with full ownership. In this model, the aircraft is owned by an individual or corporation, but its operations are sourced out to certified operators, similar to the management contracts of hotels and hospitals. There is also the option of fractional ownership, a la timeshare in resorts.

In the US, it is reported there are over 1,000 charter operators and about 5,000 public-use airports are interconnected, thus giving convenient access to executive and leisure travel. In Europe, it is estimated that there are over 2,000 airports and only 10 per cent is tapped by the scheduled operators, the rest by non-scheduled operators.

Indian Scenario

In India, Taj Air pioneered charter aviation in 1993. It is now globally recognised as a good executive charter airline service. Its jets fly to over 150 airports in 56 countries and within India, Taj Air connects to over 130 destinations.

Subsequently, a number of charter companies have started operations in India, offering executive charter, leisure charter flights, heli-sightseeing, heli-skiing, charter flights for pilgrimage, for film shooting, cargo, air ambulance, etc. However, this growth has not been commensurate with the substantial increase in the number of private business jet aircraft and helicopters. The number of non-scheduled operators in India as of September 30, 2011, according to the Directorate General of Civil Aviation (DGCA) is 133 with 388 aircraft including helicopters.

Rohit Kapur, President of the Business Aircraft Operators Association (BAOA), predicts that the number of private aircraft is expected to soar to 2,000 by 2020, indeed a highgrowth figure. This, he believes, will be spurred from demand emanating from Tier-II and Tier-III cities which are getting connected to the big cities.