General Aviation In India, Growth, Opportunities And Challenges
Aviation normally connotes a dichotomous division into:
• Civil Aviation
• General Aviation.
Civil aviation is further classified into:
• Government and private airline companies (airliners).
General Aviation deals with private aircraft owners, aircrafts owned by companies, flying clubs, small taxi operators etc. Thus, General Aviation includes all aircrafts not flown by the government and private airline companies called scheduled operators and/or the military.
General Aviation (GA) is also considered as a catalyst for economic growth. Businesses that use general aviation are said to gain competitive advantage, while communities gain job opportunities and access to the nation’s extended air transportation system.
It benefits the users of transportation services and the country’s economy at large. It increases the efficiency and productivity of businesses by reducing travel time that would be required to drive or to use more congested commercial airports. It provides training for a majority of new pilots.
Companies/ Government Agencies can use airplanes/ helicopter to:
• For corporate Use
• Offshore purposes especially helicopters
• Emergency Medical Services (EMS)
• Disaster Management
The latest statistics for the civil aviation sector depict:
• FDI up to 100 per cent is allowed under the automatic route for Greenfield projects.
• For existing projects, FDI up to 100 per cent is allowed; while investment up to 74 per cent under the automatic route and beyond 74 per cent under the government route.
The Indian aviation industry is one of the fastest-growing aviation industries in the world with private airlines accounting for more than 75 per cent of the sector of the domestic aviation market (as of 2006). A compound annual growth rate (CAGR) of 18 per cent and 454 airports and airstrips in place in the country, of which 16 are designated as international airports, the time has come to monitor the increasing growth of aviation sector.
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Today, the General aviation sector is most neglected in the civil aviation industry. It is treated as a step child of aviation in India. There are no separate guidelines for general aviation. In India there is no concept of FBO’s (Fixed Base Operator), helicopters or GA (General Aviation) terminals. Maximum use of General Aviation is in corporate charters, followed by offshore operations through helicopters, tourism etc. In the private charter industry itself there is an estimated business of Rs.2900 crores and it should not be neglected. General Aviation in India is a very niche market, especially since it is hassle free and has instant availability status. The value additional benefits of private aircraft are that it can fly to destinations not covered by scheduled airlines, has access to over 400 air strips (Only 90 are operational right now). The versatility of helicopters of reaching where nothing else can is not being exploited to its best potential.
The reasons which have lead to the poor growth of general aviation are mainly:
Lack of infrastructure- There is non-availability of FBO’s (Fixed Base Operator), terminals. The numbers of agencies for ground handling are extremely restricted, there is non-availability of MRO’S (Maintenance, Repair & Overhaul) and increases cost of maintenance. There is no separate parking and the helicopters are operating out of airports. There are no heliports and heli-routes in India till date.
Restrictive regulations- Too many agencies are involved in the procedure of getting a private aircraft such as Ministry of Home Affairs, Ministry of Civil Aviation, Directorate General of Civil Aviation, Bureau of Civil Aviation Security, and Airport Authority of India. 25% of duty is only restricted only to the corporate aircrafts, which increases costs. The owner has to restrict himself to operational timings at major metros, which renders private ownership useless.
Lack of Manpower- There is shortage of pilots and engineers. In India there are 35 flying schools, which are not producing the required number of pilots. There is a demand of about 50,000 employees and 15000 engineers in the airline industry.
The general aviation sector still has large scope for growth, by the intervention of private players and the availability of the purchasing power among the classes. The Business Aviation Association of India estimates that general aviation in that country is likely to grow by 30% to 40%. With more than 700,000 Indians accounting for a cumulative wealth of $3 billion, this comes as no surprise. Deregulation, availability of finances, eased regulations for foreign investment in Indian companies, and paradoxically, the painful experience of travel on a commercial jet are driving this growth.
The Road Ahead
Investment opportunities of US$ 110 billion are being envisaged up to 2020 with US$ 80 billion towards new aircraft and US$ 30 billion towards development of airport infrastructure, according to the Investment Commission of India.
• Indian aerospace companies are growing too. Hindustan Aeronautics Limited (HAL) was ranked 40th in Flight International’s list of the top 100 aerospace companies last year.
• Aircraft manufacturing major, Boeing, is in the process of setting up the US$ 100 million proposed Maintenance Repair Overhaul (MRO) facilities in Delhi. Air India is also in the process of launching a Cargo Hub in Nagpur while Deccan Aviation has already started one from the city.
• GE Aviation and Air India will jointly invest US$ 90 million to set up a maintenance, repair and overhaul (MRO) facility in Mumbai.
• Indocopters Private Ltd, distributor for Eurocopter helicopters in India, is planning to set up a helicopter maintenance, repair and overhaul (MRO) facility in Bhubaneswar, the company’s fourth service centre in the country.
General aviation is growing rapidly both in the developed and developing countries. India’s general aviation has failed to keep pace with the rest of the world due to general misconceptions, non-awareness and miscommunication between government and public and lack of infrastructure.
With 83,000 billionaires in India, and growing at the rate of 20% per year, the potential is amazing. Yet, there is a strong belief in India that the aircraft is a luxury item. Realistically speaking, an aircraft is not a luxury item. In fact it can contribute to an organisation operating more efficiently with many financial, economic and social benefits. It can give a multi- utilitarian denomination to the market.