The sales graph is to get further impetus when companies start understanding the benefits of business jets, albeit the recovery of business jets has been slow due to the significant number of pre-owned aircraft in the market on a worldwide basis

Forbes magazine has forecast that Indian business tycoon Mukesh Ambani would become the richest man on earth in 2014, from his present ranking of four. Ten of Asia’s top 25 richest are from India, while Hong Kong and Japan each have five and Mainland China has just one. The Indian billionaire club is growing fast and the number is 330 plus, of which 74 entrepreneurs have made their first billion rupees in the last five years.

What has that got to do with business jets? I would say, if not everything, it is the starting block. Mukesh Ambani’s megaconglomerate Reliance Industries owns about 10 aircraft, one of the largest of non-scheduled operators. In 2007, he gifted his wife, Neeta Ambani, an Airbus 319 corporate jet on her 44th birthday. Business tycoon Vijay Mallya owns a fleet of luxury private jets, yachts and the like. There is a co-relation between wealth creation and the growth of business jets. Corporate profits and wealth accretion among high net worth individuals (HNWI) spurs demand for business jets. Historically, HNWIs and private corporations have accounted for approximately two-thirds of business aircraft sales. In 2005, India had about 40 private aircraft and in October 2010, there were about 170 private aircraft and over 250 helicopters.

No Plane, No Gain

The sales graph is to get further impetus when companies start understanding the benefits of business jets, albeit the recovery of business jets has been slow due to the significant number of pre-owned aircraft in the market on a worldwide basis. A study by the US-based National Business Aviation Association (NBAA) has indicated that small and mid-sized companies using business aviation have performed better than those which did not use. However, in India, the SMEs are not in the same league as those in the developed countries. Nevertheless, companies which have used business aviation have been categorised as “well-managed companies” with superior financial performance and having better customer access.

There is no doubt whatsoever that business jets are enablers in an increasingly global marketplace. The benefits are many—on-demand flight schedules; the ability to conduct private in-flight meetings; easier access to the company’s sites and also customers (which may not be served by a scheduled airlines); and reduced stress on the executive.

In India, the business aviation growth story could be a lot more different if the aviation environment, particularly general aviation, is lot more liberalised and infrastructure comes in place. The requirements are smaller operational airports; fixed based operations; hangars; reduced taxation on imports; liberalised banking procedures, etc.

Despite these hiccups, the forecast of business jet sales for the region per se is encouraging. The demand for entry-level ‘light jets’ costing about Rs. 16 crore is on the rise and light jets currently account for a little over 30 per cent of the business jets in India. The manufacturers are waiting in the wings to capture the market that is going to unfold in the near future.