Slide 1:BUSSINESS AVIATION ASSOCIATION FOR INDIA


BUSINESS AVIATION IN INDIA :BUSINESS AVIATION IN INDIA GREAT OPPORTUNITIES AND GREAT CHALLENGES


Agenda :Agenda Overview of Indian Aviation Business Aviation In India What's driving the Growth? What’s holding us back? Challenges facing operators Are we moving forward? Questions


OVERVIEW :OVERVIEW Explosive Growth in Indian Aviation in 2005-06: Passenger traffic by 24%, aircraft movement by 17% and freight traffic by 10% Growth driven by economic growth, rising incomes, growth of tourism, increasing competition, emergence of low cost airlines, liberal government policies etc. Increasing competition and emergence of private players means greater choice, higher quality of service and lower prices.


OVERVIEW (Contd) :OVERVIEW (Contd) Airport Segment just beginning to see private sector participation Delhi and Mumbai are being managed and restructured by private companies in technical collaboration with international partners. As of now, airport infrastructure is woefully inadequate. Immediate need for existing airports to expand and upgrade India has a total of 455 airports and airstrips; only 135 of them are operational. Need to revive/develop the rest. As per current estimates, India needs USD 25 billion over the next 5 years to develop airports


OVERVIEW (Contd) :OVERVIEW (Contd) Low Cost Airlines are playing an important role. A whole new socio-economic group has entered the market of airline travel. Currently India attracts only 0.4% of global tourism and 1% of total spending in tourism. Tourism accounts for only 4.8% of GDP in India as against 10.2% of GDP world wide Next few years will see some consolidation and shakedown in the Airline industry.


BUSINESS AVIATION IN INDIA :BUSINESS AVIATION IN INDIA The most neglected sector of Indian aviation industry There are no separate guidelines for GA aircraft in India Till 2005, there were only 50 business aircraft to cater for a population of 1 billion people as against USA There is no concept of FBOs, heliports or GA terminals in the country.


REASONS FOR POOR GROWTH OF GA SO FAR :REASONS FOR POOR GROWTH OF GA SO FAR Lack of infrastructure Unfriendly government regulations. Long and tedious procedures for purchase/import of aircraft Strict banking regulations; tight control of RBI Conservative mindset of the older generation of business leaders. This is changing with the present set of younger entrepreneurs. Lack of understanding on the value of corporate aviation as business tool Strict security norms


EXPLOSIVE GROWTH AHEAD :EXPLOSIVE GROWTH AHEAD GA is likely to grow by 30% to 40 % as against the overall growth of 25% 2006 saw the fleet double. One business jet to be added every third day for next 2 years. Fleet to triple in 2 years. Present applications for import of 300 GA aircraft pending with the Govt. 100 cleared last year. All major business houses and High Net worth Individuals (HNI’s) are joining the queue to become aircraft owners. Key change is that many medium (and some small) companies are also buying A/C


WHAT’S DRIVING THE GROWTH :WHAT’S DRIVING THE GROWTH Some De-regulation of Govt control. Easier finance available for aircraft purchase Change of mindset of new generation business leaders – “tool vs. toy” Change in regulations for foreign investment in Indian companies Robust and booming economy (9%). Availability of extra purchasing power. Global ambition of Indian companies. Need creating demand


WHAT’S HOLDING US BACK :WHAT’S HOLDING US BACK Lack of Infrastructure. Airports lack parking space, skies are overcrowded, air traffic control needs major improvement in terms of training and technology. Regional connectivity is poor and regional hubs need to be created. Most of the smaller airports lack basic facilities like VOR/ILS approaches and are at best fit only for VFR flights. There are inadequate international airports and no FBOs or heliports in the country


WHAT’S HOLDING US BACK (Continued) :WHAT’S HOLDING US BACK (Continued) Shortage of manpower: There is tremendous shortage of pilots, engineers, operational personnel and ground staff in the aviation industry. This is unlikely to go away for the next 5 years. India needs 5000 pilots, 25000 engineers and about 100,000 aviation specialists from all fields of aviation over the next 5-7 years Present capacity is far below the demand – e.g. all the flight schools combined produce 150 CPL’s per year GA suffers more than commercial aviation.


WHAT’S HOLDING US BACK (Continued) :WHAT’S HOLDING US BACK (Continued) Government Regulations; Though the govt is making changes in the regulations, it needs to move at a much faster pace on this. Aviation in India is over regulated and needs to free itself from govt shackles. Acquisition committee, DGCA, BCAS, IB etc.


CHALLENGES FACING OPERATORS :CHALLENGES FACING OPERATORS Complex and Difficult regulatory environment Step-child Treatment – Commercial aviation takes 1st priority Pressure from management/ clients Lack of Standards and procedures Severe shortage of manpower - Difficult to retain key personnel Until now – no common voice – BAAI hopes to change this


ARE WE MOVING FORWARD :ARE WE MOVING FORWARD Explosive Growth expected No. of Aircraft will increase rapidly Will the environment change fast enough to sustain this? Govt needs to play its part in policy making and infrastructure development Private participation in creating the right environment and taking a lead in training the manpower. Nascent stage; could very go wrong if growth is not planned or nurtured


THANK YOU QUESTIONS ? :THANK YOU QUESTIONS ?