New delhi: India’s business jet market is seeing a spurt in sales, led by demand for entry-level ‘light jets’ that can be purchased for Rs16 crore, or just Rs4 crore more than a luxury car brand such as Bugatti Veyron.
The demand signals an increasing number of smaller companies and high networth individuals can now afford to buy private jets or rent them for business or leisure trips, say experts.
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India has the largest fleet of business jets in Asia at 122, up from 26 in 2005. Another 125 business jets are on order, of which at least 40 are light jets—smaller-cabin jets that can fly four-six people and are light in weight, according to the consultancy Centre for Asia Pacific Aviation.
This month, Mumbai-based Invision Air Pvt. Ltd will induct India’s first light jet, Embraer Phenom 100. The chartered carrier has ordered 19 more jets that it will add to its fleet gradually, said Jayant Nadkarni, a director at Invision Air.
In November, Bangalore-based Aviators (India) Pvt. Ltd, a 17-year-old chartered carrier, is expecting delivery of a Phenom 100 light aircraft.
“I was the first customer to order this aircraft (in India),” managing director Arun Sharma said. “It is economical, faster than a turboprop, can seat four people and has a washroom. It will take sometime, but it will be accepted well.”
Sharma recently sold off his turboprop Beechcraft 1900B aircraft. Phenom 100, he said, will make more economic sense for him. A turboprop charter fetches Rs85,000-90,000 an hour. While the jet will cost Rs1 lakh an hour, it will fly at 400 knots, or double the speed of the turboprop. From Mumbai, the aircraft can connect Muscat in Oman, Karachi and Islamabad in Pakistan, Kathmandu in Nepal, and New Delhi, Kanpur and Kolkata in India, the manufacturer says.
Light jets gained in prominence globally in the last decade. In September 2007, Vijay Mallya-led UB Group announced plans to invest $120 million in Epic Aviation, which manufactured light jets, but the deal did not come through.
Eclipse Aviation, a pioneer manufacturer of light jets, went bankrupt during the slowdown, leaving a handful of firms to tap the market.
Brazilian aircraft maker Empresa Brasileira de Aeronáutica SA (Embraer) has sold 170 Phenom jets. Another 380 are on order, including 40 in India, said Alex Glock, vice-president, marketing and sales, Embraer Asia Pacific Pte Ltd.
Cessna Aircraft Co.’s Mustang is its main rival, but Honda Aircraft Co.and the Mitsubishi group also have plans to enter the market. Cessna has developed a Mustang variant for India to meet the strict guidelines of the regulator Directorate General of Civil Aviation (DGCA), said Santosh Deshpande, executive vice-president, Taneja Aerospace and Aviation Ltd, which sells Cessna aircraft in the country.
The Mustang typically flies without equipment such as the traffic collision avoidance system (TCAS), which warns the pilot if another aircraft comes too close to it. Besides TCAS, the Indian variant includes a cockpit voice recorder and transponders that allow ground-based systems to detect the aircraft. The changes have pushed the jet’s price from $3.1 million to $3.6 million in India. “In three months, we should have a Mustang coming into India. It is already type-certified by DGCA,” Deshpande said, declining to give details of the orders the firm has received. He added, however, that many customers are opting for pre-owned aircraft rather than ordering fresh units.
“The preference is more on pre-owned aircraft since so many are available (as sales in West have dropped). A three-four-year-old aircraft is available (for) anywhere around 60% of its purchase price,” he said. “It also depend on how desperate the seller is. The prices were never so low in the last 15 years.”
The entry-level market’s overall growth is benefiting turboprops too.
“We are seeing a buoyant period for the last six months,” said Nigel Harwood, president and chief executive at InterGlobe General Aviation Pvt. Ltd, which sells Hawker Beechcraft business jets. The company claims to have a 60% share of the Indian market for business jets.
Beechcraft’s lower-end turboprop models start from $3 million. Harwood said his company will deliver seven aircraft over the next 12 months in India. “Our target is to sell at least one a month. There are 400-500 business jets to be bought in India in next five years.” InterGlobe, he added, is not worried about the entry of light jets as they don’t suit India’s conditions.
“We are not 100% convinced on the light jets market. Light jet works very well if you allow a single pilot to operate it—which DGCA does not—and if you don’t have severe weather conditions. I am not saying it’s not safe by any yardstick. It will create problems just because it’s a smaller aircraft and more susceptible to weather conditions,” he said.
DGCA has certified the aircraft to fly in India but does not want chartered firms to fly them with a single pilot, as it considers this to be unsafe, said an official at the regulator, asking not to be named.
Deshpande of Taneja Aerospace defended the Cessna Mustang his company is selling. “We have made demonstrations in hot weather conditions and in the monsoon. The very fact that 300 Mustangs have been flying speaks for itself,” he said.
Kapil Kaul, India chief executive of the Centre for Asia Pacific Aviation, said smaller jets could herald a new era in civil aviation. “The light jets are going to do (to civil aviation) what the low-cost airlines did to the passenger market,” Kaul said, referring to the doubling of India’s air traffic to 44 million annual passengers over the past decade.
Graphic by Ahmed Raza Khan/Mint