On November 8,2016 Indian Prime Minister Narendra Modi took a historic decision by announcing that the high-denomination notes (Rs 500 and Rs 1,000) then in circulation would cease to be legal tender.However, it impacted many business especially which relies on cash transactions. But one sector has minimal impact which is VIP and Charter Business in India.
India’s domestic aviation sector became the world’s fastest-growing aviation market last year, growing at a rate of over 20.3%, according to a report by KPMG. This sector is the ninth largest in the world and, according to a passenger forecast issued by The International Air Transport Association (IATA), it is stated to become the third largest aviation market by displacing the one in UK by the year 2026. The forecast predicts that the Asia-Pacific region will be a source of more than half the new passengers over the next 20 years.
Private jet market in India has made a gradual recovery with wealthy individuals and large corporations hiring or owning business Jets.In addition to high charter demand from major Tier-I cities like Delhi, Chennai and Hyderabad, it is now smaller Tier-II and Tier-III cities which are helping to fuel India’s private jet market growth.For example, even cities with populations of under two million like Ludhiana in Punjab are seeing a significant rise in private jet charter traffic – a clear sign that India’s wealth and international business interests extend far beyond the major metropolitan hubs.
With demand now coming every part of country , India is experiencing economic growth which in turn fuels demand for private jets.India’s middle class is now estimated to stand at around 267 million – but the country also boasts a rapidly growing number of home-grown millionaires. According to a recent report, there are now 101 billionaires living in India with a combined net worth of $200bn.
According to the Indian DGCA, Directorate General of Civil Aviation, in 2015 India had a total business aviation fleet of 487, comprising 245 helicopters, 100 turboprops and 142 business jets.It is anticipated that the private jet market will double in size in the next five years, and in a recent business aircraft forecast, Bombardier estimated that India’s fleet will be around 1,415 in 2032.
In terms of ownership, the most popular private jets currently in India are the Cessna Citation CJ2 and the Embraer Phenom 100 – primarily due to the low cost of ownership and their more economical operating costs.The highest charter demand is for CJ2 aircraft, followed by midsize private jet types like the Citation XL and Hawker 800 which are regularly used for tourist and executive air travel requirements.Large-cabin, long-range jets like the Gulfstream G550 and Dassault Falcon 2000LX also find favour with the top brass of multinational corporations with international travel requirements. There is also high demand for larger jets that cater for 25-75 passengers – although such aircraft are currently in short supply in the Indian market.
N.K.Yadav, Advisor Skyline Aviation Consulting Group (SACG), India, believes that the future of Indian aviation is bright but there are some challenges to overcome including overcapacity – partly caused by corporations buying their own private jets. And others like rising airport charges as well as competition from foreign carriers.
Yadav says: “Government needs to be proactive in promoting aviation in India – especially private jet aviation. There is a strong need for government to pitch in and safeguard the future growth of private aviation – including promoting the sector more to underutilized airports.”On the subject of market competition
He adds: “With over multiple association with worldwide manufacturers and leasing companies , we can turn the market conditions to our advantage by teaming up with Indian operators to arrange sorties for them that would not be feasible on their own jet fleet or are in geographical markets they are unfamiliar with.”
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