The economic slowdown may have pared companies? profits and their promoters? wealth, but it has definitely not stopped Indian corporates from buying private jets for their high-flying executives.
Indian corporates, individuals and private jet charter firms bought 20 executive planes and helicopters for roughly $250 million between October 2011 and July 2012, data sourced from the Directorate General of Civil Aviation reveal. The number of planes bought during the period is a 25% drop over the same period last year, but this is primarily because charter company Invision Air took a bulk of aircraft delivery during the previous corresponding period.
The country?s market for private jets remained healthy despite an 11% drop in the number of billionaires to 48 during 2011-12, as big corporates including engineering major Larsen & Toubro, bike and scooter maker Bajaj Auto and media company Zee Entertainment, among others, continued to buy planes.
In fact, despite the drop, private jet makers still predict India to become the sixth-largest market for their wares by 2021. India is expected to take deliveries of 385 jets by 2021 ? just 25 less than oil-rich West Asia ? according to Canadian private jet maker Bombardier?s market estimate from 2012 onwards.
India already has the second-largest fleet of private aircraft in Asia with 154 jets compared with China?s 215. Aviation consultancy firm Centre for Asia Pacific Aviation (CAPA) expects the business aviation market in India to be $12 billion by 2020.
?Buoyed by robust corporate profitability, India?s prospects for business jet activity are highly positive,? said CAPA in a report. ?As the installed base of business jets in India is small and relatively young, retirements will not be a major driver in the market, but it will be new purchases as wealth grows along with the economy,? Bombardier said in its outlook.
Private jets are more than just a show of wealth. ?There are actually a lot of financial benefits for a company which has an efficient private aviation fleet,? a senior executive at a global aircraft leasing firm said. ?The old adage that time is money holds true for corporates and they can save both time and money by using company jets for frequent business visits.?
But there are bottlenecks that need to be removed. ?Stringent government regulations, high import taxes and duties as well as long procedures for aircraft imports are preventing India?s business aviation sector from reaching its full potential,? said Bombardier.
?There are, however, signs of improvement as the Airports Authority of India has announced plans to modernise and bring 32 currently unused airports into operation over the next 10 years.?
