By Anurag Kotoky, Bloomberg News | Sep 26, 2015, 11:20PM
NEW DELHI — On a recent trip to the Indian state of Chhattisgarh, federal Power Minister Piyush Goyal sensed the region could woo investment from SoftBank’s billionaire founder Masayoshi Son, who happened to be elsewhere in the country.
So he asked that Son fly immediately to the state capital. Son’s colleague — mindful of India’s thicket of aviation rules — was incredulous.
“He said, are you crazy?” Goyal recalled this month in New Delhi. “We’re in a U.S.-registered plane. Just to get a permission takes 14 days.” Goyal made about 10 calls and cleared Son’s flight in just 15 minutes.
But that is a rare intervention that few in India can expect. Instead, onerous rules that sometimes delay private planes by days are causing India’s business jet fleet to shrink even as the economy grows 7 percent.
Now a group representing billionaires, the Business Aircraft Operators Association, seeks a network of airports just for private jets. The group, is lobbying the government to turn an airport about 137 kilometers (85 miles) from the financial capital, Mumbai, into the country’s first airfield exclusively for business planes. It’s now 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,” 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 percent.”
Hiroe Kotera, a spokeswoman for SoftBank in Tokyo, declined to comment on the incident described by Goyal.
Greater China had 330 business jets in 2013, more than double India’s 125, according to estimates from Bombardier Inc. The aerospace company forecasts stronger growth in India than China by 2033 — more than 900 percent to 1,320 aircraft versus 600 percent 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.
The government needs to ease some of the operational bottlenecks that continue to plague the business, according to Mark D. Martin, founder of Dubai-based Martin Consulting LLC.
It’s easy to see why pressure from the rich to tackle such obstacles may intensify.
India is the fastest-growing major economy along with China, and according to Cap Gemini SA and Royal Bank of Canada the wealth of its high net worth individuals expanded at the quickest pace in the world last year to $785 billion. That provides plenty of ammunition for plane purchases.
The nation of 1.27 billion also has the seventh-biggest land area, with hundreds of airports that are too small for commercial airliners. Business jets can also be used as air ambulances, and are able to fly to remote areas.
Overall air travel is also growing, in part because of base fares sometimes as low as 2 cents on commercial carriers. Indian airlines need 1,740 new planes over the next 20 years valued at $240 billion, according to Boeing Co.
The average net worth of a private jet user is about nine times greater than a passenger flying first class in commercial carriers, according to Fabrizio Poli, managing partner of aviation firm Tyrus Wings in London. Allowing the 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 miles 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: 8 a.m. to 10 a.m. to arrive for the day’s deal-making, and 5 p.m. to 7:30 p.m. when their work is done.
The billionaire Indian Poonawalla family doesn’t have a parking slot in the financial capital and so stores its jet in Pune, about 118 kilometers from Mumbai.
“It takes three to four days to get a permission to take off, whereas it should be three to four hours,” said Adar Poonawalla, chief executive of Serum Institute of India Ltd., 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,” 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 $2 per day.
“Policymakers in India consider it politically risky to be seen supporting business jets,” said Amber Dubey, the New Delhi- based head of aerospace at KPMG. “This is despite the fact that they themselves are key users. It’s seen as the playground of the super-rich.”
_ With assistance from Manish Modi and Anindya Upadhyay in New Delhi, Takashi Amano in Tokyo and George Smith Alexander and Ketaki Gokhale in Mumbai.