BUSSINESS AVIATION ASSOCIATION FOR INDIA

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• BUSSINESS AVIATION ASSOCIATION FOR INDIA

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BUSINESS AVIATION IN INDIA

• GREAT OPPORTUNITIES
• AND
• GREAT CHALLENGES

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Agenda

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

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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.

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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

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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.

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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.

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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

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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 (HNIs) are joining the queue to
  become aircraft owners.
• Key change is that many medium (and some small)
  companies are also buying A/C

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WHATS 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

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WHATS 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

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WHATS 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 CPLs
  per year
• GA suffers more than commercial aviation.

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WHATS 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.

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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

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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

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THANK YOU QUESTIONS ?