Business jets' wings clipped by red tape in India

Aerospace company Bombardier says India's business aviation growth potential in the near term is weighed down by high fees, taxes and bureaucracy, But it forecasts stronger growth in India than China by 2033 - more than 900 per cent versus 600 per ce
Aerospace company Bombardier says India's business aviation growth potential in the near term is weighed down by high fees, taxes and bureaucracy, But it forecasts stronger growth in India than China by 2033 - more than 900 per cent versus 600 per cent.PHOTO: BOMBARDIER

Group representing billionaires plans private jet airport network amid booming economy

NEW DELHI • Onerous rules in India sometimes delay private planes by days and are causing the country's business jet fleet to shrink even as the economy grows 7 per cent.

For a body representing billionaires such as tycoon Anand Mahindra, one way towards friendlier skies is to develop a network of airports just for private jets.

The group, the Business Aircraft Operators Association, is lobbying the government to turn an airport about 135km from the financial capital Mumbai into the country's first airfield exclusively for business planes. It is currently used by state-run Hindustan Aeronautics for military aircraft.

"It's about building an ecosystem for general and business aviation, and it's also about creating jobs," Mr Jayant Nadkarni, the association's president in Gurgaon, near New Delhi, said in an interview.

"Our industry is in recession. We've seen slowing growth for the last seven to eight years, and this year it will be less than zero per cent," he said.

HELD UP BY PERMITS

It takes three to four days to get permission to take off, whereas it should be three to four hours.

MR ADAR POONAWALLA, the chief executive of Serum Institute of India, Asia's largest vaccine maker

Greater China had 330 business jets in 2013, more than double India's 125, according to estimates from Bombardier. The aerospace company forecasts stronger growth in India than China by 2033 - more than 900 per cent to 1,320 aircraft versus 600 per cent to 2,525.

At the same time, Bombardier says in its market forecast that India's "business aviation growth potential in the near term continues to be weighed down by high fees, taxes and bureaucracy", adding that fleet expansion has outpaced infrastructure growth, leaving inadequate facilities in Mumbai.

It is easy to see why pressure from the rich to ease bottlenecks may intensify. India is the fastest-growing major economy along with China, and, according to Cap Gemini and Royal Bank of Canada, the wealth of its high-net-worth individuals expanded at the quickest pace in the world last year to US$785 billion (S$1.1 trillion).

That provides plenty of ammunition for plane purchases. The nation of 1.27 billion people also has the seventh-biggest land area, with hundreds of airports that are too small for commercial airliners.

The average net worth of a private jet user is about nine times greater than a passenger flying first class on commercial carriers, according to Mr Fabrizio Poli, managing partner of aviation firm Tyrus Wings in London. Allowing the mega rich to travel more easily encourages them to invest and create jobs, he said.

In Mumbai, a lack of space at the main airport forces small aircraft planning stops of more than 48 hours to park hundreds of kilometres away after dropping off their passengers, according to the Business Aircraft Operators Association. They also face restrictions in Mumbai from taking off or landing at just the time billionaires might want to: 8am to 10am to arrive for the day's deal-making, and 5pm to 7.30pm, when their work is done.

The billionaire Poonawalla family does not have a parking slot in the financial capital and so stores its jet in Pune, about 120km from Mumbai. "It takes three to four days to get permission to take off, whereas it should be three to four hours," said Mr Adar Poonawalla, the chief executive of Serum Institute of India, Asia's largest vaccine maker. "When you want a modification or change, it takes two days."

Expanding airports, especially in Mumbai, would "add a lot of value to the country", Mr Poonawalla said.

Whether the government will move quickly to help the country's wealthiest fly more easily is an open question, given the pressure to focus instead on helping the more than 750 million Indians living on less than US$2 per day.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on September 22, 2015, with the headline 'Business jets' wings clipped by red tape in India'. Print Edition | Subscribe