India has 400 airports, but commercial airline connectivity is pathetically low. How far will developing the private jet segment benefit the tourism industry? Voyager ‘s World caught up with Vinit Phatak – Chairman of Invision Group and Co-founder of the Invision Air ”“ who is vouching for the importance of the private jet.
How do you perceive the potential of private jet segment in India? How can the segment be beneficial to the Indian tourism sector?
I perceive the potential for the private jet segment as similar to that of the mobile communications segment in 1994. There is a large latent demand which will take a few years to actualize. And when it does, it has the potential to be probably among the top five markets in the world.
The latent demand comes from poor commercial airline connectivity to Tier II and III cities. We have 400 airports in India and commercial connectivity exists to only 38 on a daily basis and 80 on a weekly basis. Our private jets can fly to 200 Indian airports as of today. As the balance 200 airports get developed further, the number reached by business jets will increase. Commercial connectivity to these airports is still far away as these small locations are not yet developed enough to handle 70 or 130 passenger aircraft in terms of passenger loads and infrastructure; however 4 to 10 passenger business jets can easily handle the needs of these locations. The current needs being fulfilled are for specialty tourists (religious and wildlife) and top managements of corporates along with potential investors. For these clients the business jets are ideally suited.
When you have 200 airports now accessible compared to 80, clearly you can understand what this can do for the Indian tourism. It begins with a few very high-end resorts in remote locations where only a certain top level tourists can access and then gradually the number of resorts and tourists in these locations will start to increase. Eventually commercial connectivity will come and then the location has now sprung into a major tourist destination. The private jet segment is the initial spark needed to start up certain areas of India for tourism and business
There is globally a direct relationship between the GDP and the general aviation industry and so if you look at the global figures they have been impacted by the recession. For us the impact was more in terms of availability of financing and investments than in terms of reduction in demand. The current segment in India is still fairly price inelastic, so regardless of what is going on in the economy they were still flying privately. There was a slight dip but not a significant one. We adjusted our plans due to the recession by reducing our overall fleet plan from 20 aircraft to 12 and charting out a more flexible aircraft induction schedule.
Fuel Costs: For commercial aviation the fuel costs make up 40% of the overall cost of operation, for general aviation this figure is closer to 25%. So, although the impact is not as high, it still affects our overall pricing. If we can have the sales taxes which can be up to 28% reduced to reasonable levels this will help “fuel” the industry growth.
Customs duty: Nowhere else in the world is there a custom duty on aircraft. In India the duty ranges from 25% to 2.5% which for aircraft that cost millions of dollars is extremely high and can have a serious impact on a purchase decision for a private individual as well as an operator. There are no local manufacturers of business jets to protect so this duty really does not make any sense.
Parking availability: In certain airports there are difficulties in parking aircraft for short and long term. Specifically airports like Mumbai, Goa and Chandigarh with no parking available increase the end user costs as the aircraft have to be constantly repositioned to other airports.
What is your USP?
There are 139 operators of business aircraft and helicopters, yet how many can you name? Maybe two or three? This is when we realized that there is a need for a strong brand in the business aviation or general aviation (GA) sector as it is commonly known globally. We are presenting to the market a hand holding process that takes the client from his first step in a business jet (Spot Charters & Jet Cards) all the way till he becomes a jet owner (Aircraft Management & Maintenance). No other company in India is offering such an end to end service that has genuine experience in operations. There are many “consultants” who offer piecemeal services, but none of them are actually running a current operation as well. This allows us to provide contemporary and accurate regulatory and operational advice which others cannot.
Some of our general USPs are:
”¢ Very well structured Jet Card Membership Programme.
”¢ Our primary fleet consists of brand new aircraft which have been designed for high levels of utilizations like commercial aircraft, unlike most others who use jets designed only for private use.
”¢ We are the first in India to offer clients access to a 4 passenger jet, the Phenom 100 by Embraer.
”¢ We have a hand-picked team of over 30 professionals with hundreds of man hours of specialized aviation experience.
”¢ We have three bases from which we operate currently and this will be increased to six bases.
”¢ We use a specialized ERP System tailor made by combining elements of the airline and the charter industries which allow us to have live monitoring of our entire operation ensuring a level of safety and efficiency not possible by most other operators.
”¢ As we began our operation from scratch, we had the luxury to set up systems adhering to international standards for safety and operations. This will allow us to be among the first operators in India to achieve certifications from global standards organizations.
We may not be the first in the industry to start business jet services. However, we are certainly among the first to offer branded Jet Card Membership Programmes and the first to offer a serious and professional option for the entry level general aviation customers in India.
Any tie-up with the Indian travel trade?
We have a limited relationship with some high-end specialized travel agents, but we hope to reach out to many more agencies in the travel trade. We believe that our service is a high value opportunity that the travel agents can use to differentiate their offering to their clients. It is true that in the past there have not been reliable charter partners available. This is primarily because most of the charter operators who actually own their aircraft have a priority for their internal use. Charter is only a side revenue earner. Often when an aircraft is booked by a charter client it will get cancelled at the last minute since the owner wishes to fly. This is not the case with us, as we are a pure charter operator who owns own aircraft.
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