Mumbai: TAJ Air Ltd, the air charter company owned by the Tata Group, wants to expand its operations and add one more aircraft to its fleet of three, but has been forced to do a rethink.

“The present aviation scenario is restricting growth of our charter business," says Atiesh Mishra, director of operations at TAJ Air.

“In fact, we want to ramp up our operations in business aviation. But thanks to infrastructure constraints and high taxation, many corporate houses are limiting their operations. There is no space to expand aircraft fleet in Mumbai airport. Airports at Ahmedabad and Delhi have similar stories," says Atiesh Mishra.

True, air traffic may be growing, but business aviation is not.

At least 15-20 planes owned by business houses, charter services and individuals are up for sale, as the high cost of operations and lack of adequate infrastructure make the general aviation sector a tough market to crack.

General aviation includes services of airplanes and helicopters operated by private individuals, companies or charter operators.

D.K. Mishra, chief executive officer (CEO) with charter company Freedom Charter Services Pvt. Ltd, said his two planes are flying less these days.

“There is no parking place in Mumbai. We have to park our planes at airports of Ahmedabad, Goa or Pune. Parking charges at other airports are high, in addition to the high taxation," says D.K. Mishra.

A senior official at the Business Aircraft Operators Association (BAOA), a lobby group, confirmed that at least 15-20 planes are up for sale. This person didn’t want to be named.

At present, India has a fleet of 550 helicopters, planes with propellers and jets under the general aviation category.

While the industry was growing in single digits till 2012-13, there was a contraction of about 2% in the previous fiscal, says an official with the BAOA, requesting anonymity because he is not authorized to speak to media.

The BAOA expects a fall of 3-4% this year, according to this official, given that more planes are being sold than bought in the general aviation segment.

“2001 to 2007 was the golden period for general aviation that registered double-digit growth in terms of fleet addition. Post 2007, growth has slowed owing to imposition of an unexplained tax regime and the economic slowdown," the official says.

Aircraft that fall in the private category, including charter operators, have to pay import duties adding up to 19.6%, including a 2.5% basic customs duty.

In comparison, airline operators only pay a customs duty of 2.5% and are exempted from duty components like a countervailing duty and a special additional duty imposed on private airplane operators.

The lack of infrastructure is another impediment.

For instance, charter firms are finding it difficult to get hangar space and parking lots with privately operated airports, such as the ones in Mumbai and Delhi that give preference to scheduled airline operators that pay more.

Unlike in other nations, India does not have dedicated landing space and repair units for small aircraft operators. Countries like Singapore and Indonesia, the US, UK and France have satellite airports catering to small aircraft operators.

“There is no dedicated facility of heliports for helicopters. Therefore, all are operating out of Delhi airport. Business jets have to wait till civil airplanes land or take off. Helicopters have to wait on the ground for at least 30 to 40 minutes against 10 minutes in the case of a dedicated airport facility," Sanjay Julka, vice-president of BAOA, said.

A senior executive from Mumbai International Airport Ltd confirmed on condition of anonymity that the airport has space constraints, and there are no parking slots left for private operators.

Apart from charter operators, some companies that own private jets are also choosing to give them up for a variety of reasons.

At present, India’s aviation regulator Directorate General of Civil Aviation (DGCA) does not permit charter companies to import aircraft that are purchased or financed by a third-party Indian company. So, any organization that wants to operate one for in-house requirements, but also wants to charter it for financial viability, is forced to set up a full-fledged charter company, or an NSOP, which is short for non-scheduled operating permit. Under an NSOP, operators cannot publish the flying schedule, unlike scheduled commercial airlines such as IndiGo or Jet Airways.

Consequently, the number of NSOPs have tripled since 2007, courtesy lower taxation, leading to a highly fragmented market.

“I know that several companies are selling their planes. These companies are keeping the sale process confidential as it is embarrassing for them," said Bharat Malkani, chairman of Max Aerospace and Aviation Ltd, an aircraft repairing firm.

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