The whole business aviation community in india eagerly waits for the day when its ‘elitist’ image will be erased and its importance as a tool of national economy will be recognised.

The Indian civil aviation scene is kaleidoscopic. One can puff up one’s chest over the statistic that we are the ninth largest aviation market in the world (in terms of number of passengers) and on the way to becoming the third largest in the next five years. Then pause reflectively over another statistic: we have close to 500 airports with only about a fifth of that number operational. Then cast a curious glance at the sorry state of all the airlines registered in India—perhaps sparing an extra sigh each for Air India and Kingfisher. And then go on to the business aviation milieu which is perhaps the most dynamic and the most interesting of all elements of civil aviation. According to the register of aircraft maintained by the Director General of Civil Aviation (DGCA), there are 1,182 fixed-wing and 305 rotary-wing aircraft in the country; of the fixed wing, 435 are tethered to scheduled operations—leaving 747 for general aviation. If one were to discount from these figures the government and training aircraft, the total fixed-wing aircraft left over would be 173 for non-scheduled operations and 244 for private use. Similarly, the number of rotary-wing aircraft would be 215 for non-schedule operations and 50 for private use. These 417 fixed-wing and 265 rotarywing aircraft represent the business aviation flying assets in India. Of the fixed-wing aircraft, 154 are jets.

This number is decidedly small for a country of the size of India. Besides the geographical extent of the nation, there is also the fact that our economy is growing robustly. At the individual level of wealth creation too, the number of India’s high net-worth individuals (HNIs) is growing at a speed perhaps the fastest compared to other countries. Yet the growth of business aviation has remained somewhat stunted. Why? This simple question evokes many responses, including some passionate ones from the business aviation community. Before delving into the current status of business aviation in India, let us dwell for a moment on the lack of understanding in India of the importance business aviation has, as a contributory factor for national growth and national economy. At the recently concluded Indian Business Aviation Expo 2012 in Delhi, Naveen Jindal, Member of Parliament and head of Jindal Steel, who was the chief guest, pledged his support to the industry but recounted some of the frustrations and petty bureaucracy he had encountered whilst operating his company’s aircraft. He highlighted the fact that business aviation was essential to his business (and others’ too) and to the future prosperity of India. At that event, there was general agreement that the regulatory process in India is complex, bureaucratic and slow to change, with too many Ministries involved in the process of owning and operating aircraft. There was also the issue that general aviation takes a back seat to scheduled commercial operations. In the US and in Europe there have been formal studies carried out to assess the contribution of business aviation to national economy (as an illustration, see US Federal Aviation Administration’s August 2011 study entitled ‘The Economic Impact of Civil Aviation on US National Economy’).

In India, however, aviation per se is seen as a luxury medium (the valiant efforts of Captain Gopinath to align its image with the aam aadmi’s notwithstanding). Drawing up a quantitative relationship between aviation and national economy is definitely a challenging task due to the dynamic and multi-pronged interdependent linkages between various contributory factors; however, some direct correlations can surely be demonstrated. While quantifying direct aviation-related jobs would be simple, estimates on jobs indirectly related to aviation would involve conjectural statistics. However, in India, there does not appear to be any effort on the part of the establishment to carry out quantitative or qualitative exercises to establish linkages between aviation and national growth. As a result, the industry continues to suffer despite no individual, office or organisation holding malice towards it; some of the symptoms are as follows.

Kiran Rao, VP Sales and Marketing, Airbus, sums up some of the problems aptly, “The Indian Government sees aviation as a luxury and taxes are based on this assumption. But the fact is that aviation is not a luxury, it is a necessity. In India, fuel prices and airport charges are high, and the yields are not keeping up with the costs. Even on the aircraft maintenance side, we come up against high import charges on spare parts that are required for maintenance and repair of aircraft. The result is that an Indian carrier that can get its aircraft serviced right here is forced to send it to Dubai or Malaysia or any other country. The issue for airlines here is simply the issue of keeping up with the rising costs. It is time the government takes a long sustainable look at the tax structure.”

The aviation fuel cost in India is perhaps the most glaring example of government apathy towards aviation matters. The high end-user cost results from an unfair “import parity” formula applied to pricing of crude refined in Indian refineries by the three government owned oil companies (Indian Oil, Hindustan Petroleum and Bharat Petroleum). Then there is an eight per cent excise duty levied by the Central Government. Over and above that is an average of 24 per cent sales tax/value added tax (VAT) imposed by state governments (this is the second highest average figure in the world, behind only Bangladesh). As a result, the average cost of aviation fuel in India is 50 per cent more than the global average. The reason why this state of affairs is permitted to exist is the political compulsion of subsidising kerosene oil and LPG; the cross subsidy on aviation fuel hikes the price. The rationale—more voters use kerosene and LPG than aircraft—is understandable but not acceptable, certainly not from the point of view of business aviation.