According to the US consultancy Firestone Management Group, there were 136 business jets registered in India as on March 15 this year, 95 of which were less than ten years old. In the past 36 months alone, no fewer than 43 aircraft have been delivered to Indian customers, representing an impressive growth rate of 46 per cent.

When business jet manufacturers are down in the dumps they throw open their windows and look ‘East’ because that’s where all the sunny news is coming from. The traditional markets of North America and Europe offer little cheer. Western businesses are grappling with the ever-present threat of double-dip recession and have neither the inclination nor the time to place fresh orders for jets. Although business aviation is now a key part of the global aerospace industry, Richard Aboulafia, Vice President Analysis with Teal Group Corporation, the USbased aerospace consultancy, says, “Business aircraft have been hit harder by the economic downturn than any other aerospace market.” And what is striking is that even amongst business aircraft the pain is not evenly shared. The top half of the market—jets priced at $26 million ( Rs. 117 crore) and above—managed to grow over the last three years, albeit at an unimpressive 1.5 per cent. But the bottom half of the market—jets costing $4-25 million—dropped by a devastating 57.1 per cent. Naturally, therefore, Embraer, Cessna and other business jet manufacturers have prudently cut low-end production rates. At least the market has stopped falling and is expected to look up again next year. And in China and India, both huge and growing economies, the potential for new business jet sales seems as strong as ever.

Spreading Wings

Indian entrepreneurs flush with rising revenues are now aspiring to extend their empires ever more widely. And business jets are their tools of choice. Till a few years ago, the demand for jets was mainly from the super-rich. In 2003, there were just about 350 private aircraft in the country. But now, with the total number hitting 650, business jets are seen less as status symbols and more as “must have” to ease pressure and save precious time for senior management. Even some middle level firms in Tier-2 and Tier-3 cities are seriously studying their business aviation options.

India’s private aircraft fleet is still dominated by helicopters—about 375 of them. However, according to the US consultancy Firestone Management Group, there were 136 business jets registered in India as on March 15 this year, 95 of which were less than ten years old. In the past 36 months alone, no fewer than 43 aircraft have been delivered to Indian customers, representing an impressive growth rate of 46 per cent. Hawker Beechcraft tops the table with 35 private jets—26 per cent of the total. Cessna is second with 31 jets, Bombardier’s tally is 24; there are 17 Dassault Falcon jets and Gulfstream Aerospace accounts for 15. Bringing up the rear, Embraer currently has nine, Boeing three and Airbus two business jets in India. According to Karan Singh, Vice President, Business Aviation Association of India (BAAI), “India is poised to be among the top five private aviation markets in the world. Even assuming a modest 12.5 per cent growth, which is less than the average achieved in the last five years, India will triple its fleet of private jets by 2020.” By then there will be an estimated 1,800 private aircraft in the country.

Why are businesses so keen to acquire jets? The story of what happened to spur business aviation in North America and Europe is now being repeated in India. Strangely enough, one of the main reasons is that commercial flights are by and large limited to metropolitan areas and large cities. Infrastructure is not always available for big jets in the hinterland and connectivity between many smaller cities is not good. If business people wish to save time on travel (and they always do) their only option is to use private planes. The Airports Authority of India (AAI) is making determined efforts to upgrade the existing airports and establish new ones but its progress has been steady, rather than spectacular. For many years to come, the majority of airports in the country will only be accessible by smaller aircraft flown by regional carriers and private operators. That is why India is predicted to be among the top markets for business jets within a decade or two ahead.

The factors driving the growth of business aviation are not restricted to the country. Many Indian companies are spreading their wings to Africa and Eastern Europe and have to contend with unsatisfactory air connectivity to and within those regions as well. What could be more convenient than a corporate jet? And Indian companies can afford to buy, especially since jets are proven productivity-enhancing tools. There’s also a growing demand for private jets from state governments which feel the need to stay connected even to their remotest regions.

Is cost a constraint? Far from it. For short flights, a very light jet like the Cessna Citation Mustang costing $3.1 million ( Rs. 14 crore), or Embraer’s Phenom 100 going for $3.9 million ( Rs. 18 crore) are favoured by private owners and small businesses. They do well for short flights within the country or even to Singapore or the Middle East. However, a larger business jet is ideal for bigger companies and charter operators contemplating long-haul flights to Europe or North America. While the Bombardier’s midsize Learjet 60XR costs $14.1 million ( Rs. 64 crore), the super-midsize Hawker Beechcraft 4000 bears a price tag of $22.9 million ( Rs. 103 crore). In the ultra-long-range category, there’s the Dassault Falcon 7X costing $48.6 million ( Rs. 219 crore). In fact, there’s a variety of jets on offer, from the cheapest to the most expensive—about 60 models—going right up to the Airbus A320 Prestige that any major industrialist can own for a cool $85 million ( Rs. 383 crore). Perhaps 40 per cent of the private aircraft being bought in the country are new and the rest are pre-owned. India’s army of billionaires and millionaires is also growing. According to Forbes’ 2011 list, the country has 55 billionaires in dollar terms, the fourth highest number in the world. Although China has twice as many billionaires (115), India has almost twice the number of private jets. A recent study by global consultant Deloitte Centre for Financial Services predicts that the number of millionaire households in India will grow from 2,86,000 to 6,94,000 between 2011 and 2020—a growth of 143 per cent. That means many more potential customers for private jets.