Region VII: Middle East/Asia (MID)

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Indian Business Aviation Group Hoping New Government Brings Change in Policy

April 7, 2014

Listen to an NBAA Flight Plan on business aviation in India.

Long concerned about the “one-size fits all” attitude among many in India’s government, business aircraft operators there are “cautiously optimistic” about the coming of a new government in June, one that may bring with it major changes in that country’s policies toward general aviation.

Representatives of India’s Business Aircraft Operators Association (BAOA) met last month with senior officials from the office of the Director General of Civil Aviation (DGCA) to discuss topics ranging from tax relief for maintenance, repair and overhaul (MRO) facilities, to a new government policy that would allow commercial carriers to team up with non-scheduled operators to provide regional air service throughout India.

“We gave our presentation and we put it in strong words,” said BAOA Secretary Rajesh Bali. “What we are doing is trying to reorganize things so that when the new government is in place in June, we’ll start on a very active track.”

BAOA considers that fresh start, with renewed energy, vital to the continued growth of business aviation in India, Bali said. Last month, BAOA President Rohit Kapur again called for a separation of policy toward commercial and general aviation, suggesting that the nation’s current policy of applying the same rules to both sectors was hurting the growth of business aircraft operations in his country. He asked the DGCA to consider new policies that would apply strictly to general aviation.

There are currently 525 business aircraft registered in India. With a growth rate once projected at 12.5 percent per year, the number of business aircraft in India was once forecasted to be 1,783 by the end of the decade. However, with few signs until now of substantial aviation policy reform, BAOA’s estimate has shrunk to approximately half the earlier figure – 922 non-scheduled aircraft in use by 2020. Worse, Kapur said, the number of de-registered aircraft is on the rise.

India’s aviation policy is also of concern to business aircraft operators and their partners here in the U.S. Universal Weather & Aviation Vice President for Government and Industry Affairs Lex den Herder pointed to ongoing concerns about the issuance of flight crew visas.

“We’re seeing some additional scrutiny with visa processing by the consulate in Houston,” he noted. “This is based on a heightened evaluation of those entering India. There also appears to be some interpretive glitches involving the company recently hired by the Indian government to process visas.”

Bali said he hopes the arrival of a new government in Delhi will herald a change in the tax status of MRO facilities in India. Currently, such facilities are taxed at the rate of almost 40 percent, he said. BAOA executives predict that tax relief for MRO operators would be a boon to both the industry and to the Indian economy. The market for MRO services for domestic aircraft alone is estimated at $700 million a year. Up to 95 percent of that work is currently performed outside the country.

While the DGCA recently announced a policy shift to allow greater cooperation between airlines and regional non-scheduled operators, Bali said the nation’s airport infrastructure is ill suited for such operations.

“We have to talk about connectivity to every nook and corner of India,” he said. “However, there are currently no parking areas or terminals that have been set aside for such aircraft.”

Bali said he remains upbeat about the long-range prospects of general aviation, including business aviation.

“General aviation has no choice but to grow, given the size of our population,” Bali said. “The road ahead is difficult, but we are determined to surmount all these problems.”