Chartering a plane is better than owning it

Tags: News

Clubbing with commercial operations led to stymied growth

With many companies missing their growth forecast, chartering flight services is seen as a better option than to own an aircraft.

The business aviation segment in India has seen a number of aircraft being deregistered. In 2013, 19 aircraft were sold while in 2012, 31 were deregistered, according to a top official of Business Aircraft Operators’ Association (BAOA), the general aviation industry body.

Resultantly, several companies, which had placed orders for small aircraft, have cancelled them or have deferred taking their delivery, according to Rohit Kapur, president, BAOA. "It is getting difficult to own an aircraft due to the high cost of operations," he said.

Deregistration of aircraft is linked with the performance of a particular sector. “Those that are doing well did not sell the aircraft while others did,” he said, identifying mining as one of the sectors that is not doing as well as expected.

The regulatory framework in India did not help the business aircraft segment, Kapur said adding that the sector’s growth has been stymied due to its clubbing with commercial operations and there is a need for a separate regulatory frame work for general aviation.

According to Kapur, the growth in the number of aircraft in the segment too has been flat; in 2013 there 552 aircraft, 558 in 2012 and 551 in 2011. The growth rate in 2013 slipped into a negative loop. Growth rate was one per cent in 2012 and 2011, five per cent in 2010, 13 per cent in 2009 and the highest pegged at 19 per cent in 2008, he said.

The industry earlier had projected the sector to grow over 12 per cent. However, the actual growth has been about 50 per cent of the projected growth rates and the same is likely to continue for some years to come, Kapur said.

The MRO segment too did not take off on anticipated lines forcing the operators to seek services offshore, which is increasing the operation costs, said Kapur. “We found it extremely difficult to sustain operations. The operators had to search for new revenue streams,” said Vinit Phatak, managing director of Invision Air Services.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Sebi must not be lax in weeding out mutual fund houses

    Last May, capital market regulator Securities and Exchange Board of India (Sebi) amended the Sebi (mutual funds) regulations, 1996, directing all fund

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Nigavekar

New model for effective education

After interacting with students and teaching community on a ...

Rajgopal Nidamboor

Let the spirit of sport pervade everyday life

Sport, like meditation, is nothing short of a spiritual act. ...

Shona Adhikari

Pop art is truly a feast for the eyes

The internationally reknowned Bruno Art Group’s presence in India had ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture