Private planes return to corporate radars3 min read . Updated: 14 Mar 2010, 11:34 PM IST
Private planes return to corporate radars
Private planes return to corporate radars
Mumbai: Business aviation, or the use of private planes and helicopters by companies, is rebounding as economic recovery shows signs of being sustained and firms that provide such facilities return to profitability.
Companies, both large and small, are resuming talks with corporate jet manufacturers as prices of private jets have come down by 40%-45% from their 2008 levels.
“Ever since this new year, there is lot of buzz in the Indian business aviation scene," said Karan Singh, vice-president of the Business Aviation Association of India.
Also See 1o-Year Outlook for Business Jets (Graphics)
“Indian companies could conclude many deals before this month-end and the sector is expecting a year-on-year growth of 15-20%," he told Mint last week.
Religare Voyages Ltd, promoted by Religare Enterprises Ltd, has announced it will start an international air ambulance service with a private jet after obtaining regulatory approvals. “We had stopped acquisitions when the slowdown hit the economy. Now we are restructuring our business model to tap all opportunities of business aviation," said Sanjay Godhwani, group chief executive and managing director of Religare Voyages, adding that a few business announcements were in the offing.
Taj Air, promoted by Taj Hotels Resorts and Palaces, has bought two private planes recently—a Falcon 2000LX jet and a P180 Avanti II turboprop aircraft.
And at India Aviation 2010, the second international conference on civil aviation in Hyderabad earlier this month, aircraft and helicopter makers signed a raft of deals with Indian firms for their products.
India has 515 private aircraft, including 257 fixed-wing planes and 258 helicopters.
Faced with a gloomy global economic outlook since late 2008, many firms had slashed travel budgets, including flying by private jets. But with the economy now returning to higher growth levels—industrial output numbers released Friday showed a jump of 16.7% in January—plane makers are looking to sign fresh deals.
In its Business Aircraft Market Forecast 2009-2018, Canadian plane maker Bombardier Inc. said India would likely buy 250 business jets in this period,?while China would buy 300.
Over a 10-year period, Chinese and Indian business aviation is expected to post the highest compounded annual growth rates of 16% and 14%, respectively, due to their relatively smaller current fleet and their potential, the forecast said.
Leading business jet makers Bombardier, Gulfstream Aerospace Corp., Dassault Falcon Jet Corp., and the US-based Hawker Beechcraft Corp. and Cessna Aircraft Co. sell in India through their own sales teams or through third-party representatives.
Makers of commercial passenger planes such as Airbus SAS of France, Boeing Co. of the US and Brazil’s Embraer SA also sell corporate jets.
Speaking to Mint, David Dixon, regional vice-president (business aircraft sales) of Asia-Pacific at Bombardier, said business aviation is going global. North America accounted for only 29% in business aviation demand in 2008, down from 69% in 1999.
“Over the next 15 years, the emergence of China and India should translate in(to) stronger demand for long-range aircraft," he said.
During the India Aviation show, Religare Voyages took delivery of an AugustaWestland AW109 Grand, increasing its fleet size to 11. AugustaWestland, a Finmeccanica SpA company that has sold 10 planes in India for corporate travel and offshore services, also sold a 12-seater AW139 medium twin-engine helicopter to Jindal Steel and Power Ltd during the air show.
Indocopters Pvt. Ltd, a Vectra group company, signed agreements for three AS 350 B3 helicopters—two to Summit Aviation Pvt. Ltd and one to Morey group. The company also signed an agreement for an EC135 Eurocopter to a Mumbai-based company.
Indocopters’ executives declined to name the firm, but said the total value of all the contracts was estimated at €15-18 million (Rs93.69-112.42 crore today).
Helicopter maker Eurocopter signed two 50:50 joint venture agreements with state-owned Pawan Hans Helicopters Ltd for setting up a maintenance, repair and overhaul centre and a training centre, likely either in Delhi or Mumbai. “We have already signed close to 40 memoranda of understanding with the Indian private sector players such as the Tatas, Mahindras and Larsen and Toubro," said Eurocopter India chief executive officer Marie-Agnes Veve. “The idea is to have our manufacturing and assembling facility in India going forward."
“Business aviation is reviving in India. We are in talks with at least half a dozen potential corporate houses and are expecting to conclude deals shortly," said Alain Aubry, vice-president (sales and marketing) of Dassault Aviation, that makes Falcon jets.
Vivek Saxena, senior vice-president (marketing) of PCI Ltd, a firm responsible for sales of very light jets made by Austria’s Diamond Aircraft Industries, said relatively unknown firms, high net-worth individuals and medium-sized companies are more keen on corporate jets. He added that his company is in talks with at least three medium-sized companies for corporate jets.
Photograph by Bloomberg and Graphics by Yogesh Kumar/Mint