New Delhi: The world’s largest private jets operator, NetJets Inc., owned by billionaire Warren Buffett’s Berkshire Hathaway Inc. has joined hands with Mumbai-based Shreyans Motors Pvt. Ltd to sell international air charter services in India.
Earlier this year, Club One Air, until then India’s sole fractional ownership firm, saw new competition emerge from the Tata group, which announced its entry into the emerging business jets market through a stake in Singapore-based BJets Pte Ltd.
Fractional aircraft ownership allows multiple people to “own” a single aircraft and share flying time without having to deal with maintenance and related issues.
Gliding in: A Citation CJ2. Singapore-based fractional ownership private jet firm BJets Pte Ltd, part-owned by the Tata group, had announced in February that it will purchase 50 such planes.
NetJets and Shreyans will initially start with a revenue-sharing model.
“India’s economy is booming and, in today’s global marketplace, more and more Indian companies are investing and doing business abroad,” said Robert Dranitzke, director of marketing for NetJets Europe in a statement announcing the strategic partnership with Shreyans CEO Ashish Chordia in Mumbai on Wednesday.
As a franchisee, Shreyans Motors will sell NetJets products and services to Indian customers for long-haul sectors such as Mumbai-London.
In addition to owning a piece of the aircraft, customers can also buy flying time, much like international calling cards. A 25-hour flying time, valid for a year on a light jet, can be bought for about Rs1 crore to start with. That will allow the passenger to be picked up from any small city in India where business jets can land and be dropped at an international destination.
“A Cessna 172 that costs about Rs80 lakh can be owned by 10 people, costing Rs8 lakh each, which is hardly any cost for the flexibility it provides,” said Mark Martin, an analyst with KPMG’s India offices, referring to the popularity of the concept in the US since the 1960s. “If it can happen in an evolved mature market, it can happen in India, too, now.”
NetJets and BJets may be a little early for the Indian market, says one analyst.
“By the time they gain size and scale it will be few years...,” said consultancy Centre for Asia Pacific Aviation’s analyst Kapil Kaul.
Infrastructure bottlenecks, availability of technical staff, expensive pilots and government regulatory issues over multiple owners for an aircraft will be the key challenges for the companies, he said.