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Aviation

Take a trip back in time. In fact asfar back as the late 1930s whenJ.R.D. Tata became the firstIndian to hold a private flying

licence. Within a year, J.R.D. made his soloflight from Bombay to England, and by1932 he set up Tata Airlines. It was onlymuch later, in 1998, that VijaypatSinghania made another credible mark.Singhania also flew solo, in a micro-lightplane from the UK to India in 22 days.

J.R.D., of course, was the Father ofIndian Aviation. His Tata Airlines is todaythe flag carrier Air-India, which completes75 years of operation this year. Singhania,on the other hand, recently lifted off on ahot air balloon to a height of 69,000 feet,breaking all earlier held records. "Being 67won't stop me," he told us then. "There isa lot to do before age will catch up."

J.R.D. and Singhania are two of India'shigh profile aviators, yet aviation itself hasfailed to take off in the past. Indian liquorbaron Vijay Mallya, for instance, startedUB Air in 1990, "but when regulationdemanded that I operate as an air-taxi serv-

ice I backed out", he says. Today Mallya isback in business, running the popularscheduled airliner Kingfisher Airlines. Allplanes from his earlier venture find place ina corporate fleet, his non-scheduled or pri-vate fleet of aircraft: an Airbus 320, aBoeing 727, a Gulfstream 3 and an HS125.

Mallya is, however, not the only one."There are about 150 planes that belong tocompanies under the non-scheduled cate-gory," says Kapil Kaul, chief executive offi-cer, of consultancy firm Centre for Asia-Pacific Aviation (India). That's not impres-sive. Given that in America, West Asia and

Europe, nearly 150,000 general aircraftcrisscross the skies annually. And it's notjust that. "In India nearly 40 per cent ofthese are 20 to 25 years old," says Kaul.

Yet, examining past numbers is likelooking through a narrow-focus lens. Thegrowth of this business is directly linked tothe state of the economy. With the econo-my now booming at 8-9 per cent annually,the shopping has begun, he adds.

In the past five years, for instance,Indian industrialists have started taking tothe air. The city of Mumbai now has 15 pri-vate jets. Second is line is Delhi with an

Corporate fleetsCentury Textiles and Industries Cessna Caravan-II

Escorts Bell 407 (H)

East India Hotels HS-125-700 B

Essar Gulfstream II, Gulfstream V

Poonawala Aviation Cessna Citation 560XL

Raymond Bell 206 L3 (H), AS355N (H), HS 125-800B

Reliance Transport Gulfstream IV, Global Express

Reliance Infrastructure King Air B-200

Taj Air Falcon 2000Indicative list. Source: Indian Directorate General of Civil Aviation

Fancy a flight

Indian businessmen are buying planes like never before. Ryan Rodrigues reports

aviation.qxp 23/1106 3:27 PM Page 62

almost equal number of private planes.Third, surprisingly, is Pune, where thePoonawala family keeps a fleet of aircrafts.The Bajajs have a fair share, and so do theKirloskars and the Chabbrias of Finolex. InBangalore and Chennai, Deccan Aviation(the low-cost carrier Air Deccan's sub-sidiary) has a stronghold, though it's large-ly helicopters that ply in this region.

Among the bigger buyers of privateplanes is the Mukesh Ambani-run RelianceIndustries. Mukesh already owns aGulfstream IV and a Global Express, and"on the latter he regularly flies on aMumbai-London non-stop route", says thecompany spokesperson. Next in his shop-ping list is an Airbus corporate jet.Mukesh's younger brother Anil, who runsADAG, is also on the lookout for aircraftfor his group.

The Essar group, on its part, owns threeplanes. "We have plants in Jamnagar andHazira where air strips exist, but there is noairline service," says a spokesperson."That's when owning your own planehelps." Plus there are visiting partners whoneed to be flown around on short notice.The Birlas, Mallya's United Breweries, theSahara group, the Singhanias and ITC - allare out shopping.

This is just a sampling. To understandthis sudden flurry of activity go back fiveyears again. Captain S.K. Malik, who runsan air charter service Span Air, had thendrawn up plans to start a fractional owner-ship scheme. For a one-time investment of$110,000, he had 1/10th ownership of ahelicopter on offer with 60 hours of flyingtime annually. "I found not a single buyer,"

he says. Today Malik prefers to concen-trate on his air charter services business,waiting for delivery of a Hawker 850 thatwill primarily serve the Tata group.

But with the economy booming -according to Forbes, the number of dollarbillionaires in India has doubled since lastyear to 27 - there is a growing club of busybusinessmen. Last year CluboneAir cameinto the picture and introduced a full-fledged scheme for fractional ownership.Run by Manav Singh, it started with oneCessna Citation II aircraft, and today has afleet of eight aircraft. "We are expandingonly because we have received a goodresponse from the market," says Singh. Bynext year, his fleet will touch 30, a rangeincluding Cessna Citation XLs, Gulfstreams,a Challenger and an ATR 900.

A Cessna Citation II can cost $4.5 mil-lion. At CluboneAir, for instance, the acqui-sition cost of a 100-hour purchase falls to$556,000, about 65 per cent of which isrefundable at the end of five years. Thereis a monthly management cost of$10,000. This pays for all infrastructureand engineering needs. There is a directoperating cost of $1,000 per hour, whichincludes fuel, landing and parking charges.

Singh says this is much lower whencompared to the actual cost of the aircraft,or the cost of maintaining one. Plus, withapprovals from defence airfields, he hasaccess to 350 airstrips compared to the 60that are open for public use. He has ropedin six owners so far, names which he saysare confidential. But Delhi's Modi family,Hero Honda's Munjals, actors Amitabh andJaya Bachchan, if not executives from

Shell, Cairn Energy, BHP Billiton and RioTinto are regular fliers. Singh is now start-ing to expand his network, to places likeBhubaneshwar, Pune and Raipur to cater topower, oil and chemical companies that aresetting up bases there. "You have to gowhere the customer is," he says.

What Singh has, however, surely man-aged to build is a buzz around fractionalownership. There are now, in fact, threemore players waiting to get in. Saija Air,Fidelity Aviation and Forum One are allpreparing for their launches.

With the Indian skies now open for pri-vate competition, there has been freneticactivity in passenger flight operations, with16 existing players and a dozen more wait-ing to get in. The Indian middle class hastaken to the sky like never before. And therush by the rich has just begun.

SHOPPING FOR PLANES: Mukesh and Anil Ambani, Vijay Mallya, and Kumar Mangalam Birla

AVIATION

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