Invision Air launches business aviation operations in India to cater to the growing numbers of high net worth individuals. EXEC chats with the Chairman, Vinit Phatak.
With scheduled airlines increasingly focusing on low cost business models to survive in the current environment, lower numbers of business class seats are now available and the needs of the high-end market segment are not being addressed, according to Vinit Phatak. It was to capture this opportunity that the business jet service, Invision Air was launched.
From Drawing Board to Hangar
Invision Group is primarily into telecommunications, dealing with antennas and mobile networks. I had always harbored a passion for aviation and I landed in India in 1992, just when India was shedding the pre-1991 shackles of license-raj. I was excited about doing business in the country. Soon, Jayanth Nadkarni (Director, Invision Group) joined us. He was an ex-Air Force pilot and together we were always on the look out for opportunities in the aviation sector. Soon we realized the huge gap that was opening up in the executive travel service with the tremendous amount of growth that was happening in India. Commercial airlines were not able to provide the kind of connectivity that a few corporates required. We then acquired two of Embraer’s Phenom series jets and everything just fell into place.
Who Would Invision Air Ideally Cater to?
The second layer of corporates…The executives immediately below the Tatas and Birlas, who either don’t have the inclination or infrastructure to own private jets. Those seeking all the advantages of business aviation – privacy, flexibility, efficiency and luxury while looking to save on their most precious commodity – time.
We are planning to operate from six cities with two aircrafts each – a four seater and a six seater. We have already bought two of the aircrafts and the other ten are due for delivery soon. The single aircraft type fleet provides for many advantages, which increase dispatch reliability, safety, and economies of scale.
In addition to domestic travel, we fly to a few close-by international destinations as well – Maldives, Sri Lanka, Singapore. We are of course restricted by the fact that these aircrafts can stay in the air for only about 2-3 hours (4 hours for the 8 seater) after which it would require refueling.
In Black & White
The Spot Charter rate is around Rs 150,000 per flying hour plus taxes and ground handling charges. We will be shortly launching our Jet Card Program, a set of structured programs for 25, 50, & 100 hours, which provides further discounts on this rate based on the number of hours that a customer buys.
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Spelling out the Growth Potential
Our recent survey has indicated that there are about 136 business jets in private and commercial use in India today. This number is expected to rise to 400 by 2020, which is an average growth rate of about 20% per annum. As our activities revolve around business jets we expect to grow at approximately a similar pace, so conservatively we expect to grow at least at the rate of 12% per annum after the first two years of operation.
I wouldn’t say we are immune to the problems plaguing the aviation industry in the country now but we are definitely a little less sensitive. For instance, the fuel costs constitute up to 40 percent of the operational costs of commercial airlines while it is only 25-30 percent for us. So fluctuations in the fuel charge won’t impact us as much. Of course, we do have to suffer the same regulatory and infrastructure related pitfalls as them.
Even with all the belt-tightening going on in the current economic climate, I am certain we will not face any shortage of customers. We are offering only what’s need – ‘practical luxury’; not bedrooms and Jacuzzis but office spaces and meeting rooms in the sky.
We expect our total initial investment to be around US$20 to 25 million and one can expect to get a reasonable return in about 8 to 10 years.
The Spot Charter rate is around Rs. 150,000 per flying hour + taxes and ground handling charges. We will be shortly launching our Jet Card Program, which provides further discounts on this rate based on the number of hours that you buy.