Forecasted Private Jet Boom in India

In last one week, the Ahmedabad city airport, in the Gujarati region of India, for the first time recorded around 100 chartered/non-scheduled flight movements in such short duration as more than 100 VVIPs, including Prime Minister, cabinet ministers and several CMs, landed for 13th Pravasi Bharatiya Divas (PBD) and 7th Vibrant Gujarat Global Investors' Summit (VGGIS).

Compared to the last edition of VGGIS, this time the movement of private jets was almost double. "From January 7 to January 13, Ahmedabad airport handled 100 non-scheduled flight movements, including 50 departures and same number of arrivals," said R K Singh, airport director.

According to data available, during 2013 Vibrant Summit, around 50 movements of chartered jets were recorded, including 30 arrivals over three days. This year the maximum number of movements was registered on Day 1 of Vibrant Summit on January 11 with 50 movements (25 arrivals + 25 departures). The movements included those of Prime Minister Narendra Modi, Union home minister Rajnath Singh, Bhutan PM Tshering Tobgay, US secretary of state John Kerry, and UN secretary general Ban Ki-moon.

VVIPs and corporate honchos like Mukesh Ambani, Anil Ambani, Cyrus Mistry, Anand Mahindra, Shashi Ruia, A M Naik, Jay Mehta with wife Juhi Chawla and Dr Baba Kalyani among others landed on the morning of January 11 in their private jets.

The Airports Authority of India had put airports in Vadodara, Udaipur, Bhopal and Indore on standby for the parking of chartered jets. "None of the private aircraft had to be moved out of Ahmedabad airport for parking," added Singh.

Why are the Gujaratis so good at business?

I think pro-business mentality comes to Gujaratis from way long before even Europeans or Mughals invaded India. One reason for that is its geographical presence,it is a state of a shape in peninsula over Arabian ocean which has largest coast in India and had shortest sea route to Arab countries, Africa and Europe. The trade between India and other mentioned had been in existence over a long long time, until Mughal countries started war in Arabian sea against Europeans. That is why they had to find a new way to India (It is also an unverified story of Vasco de Gama meeting a Gujarati trader 'kanha' in Africa and followed him to India.) Back in time there might be huge population of traders who did business with other countries through Arabian sea from Gujarat that have created huge business minded population and grew sense of trading. (Don't believe me? Notice the power of a Gujarati to bargain price in the market next time.)

Now according to India's caste based system, where a traders' son takes care of his father's business, this trades grew and divided.

Now assume Mahatma Gandhi went to study and practice law in Africa around 1890s where there were already huge population of Gujaratis in South Africa and was a popular destination.

Gujaratis spend sparingly, they don't believe in flaunting their wealth (Yes, you won't even know your Gujju neighbor might be a billionaire). The reason is Gujarat is very hot & dry land, most of the land is salty and barren, it has witnessed many droughts in past, so key is in saving your resources that they know very well.

They are very social, you'll mostly find a Gujju guy funny and talkative that is again a key they know lot of people.. lot of contacts (Yes!! Narendra Modi might be in their 6 degrees of separation) which helps them grow their business.
The real reason is in Gujarati culture. Every family inherently knows about this and this passes on from all the interaction between family and friends when you grow up. and from observation it keeps improving and keeps up with changing world. They are natural networkers.

These are some of the Gujaratis way of doing business:

? They know how to keep their employees happy at the same time getting work out of them. (Something like what western software companies are doing now, make workers happy and they work better)
? They don't let emotion ever control money related decisions. They do lot of charity work, but it's different department.
? They know people; who will cheat, who will steal, who will be faithful. they are maybe stereotyped but it's based on statics and they work.
? It's not in Gujarati culture to give most importance to fighting wars or be proud or go cultural, spiritual, extra educational (beyond practicality) or religious. Family welfare is the first preference, so you see families, where everyone is settling to United States, as soon as one person gets green card. They stick to their family very well. (Maybe it is because of religion is very comfortable here? It's kind of religion (in lose sense) that says, enjoy your life, do whatever it takes. I'm atheist but sometimes I still can't argue with my parents about some religious practices. it's very practical and it does do good. )
? They don't start fighting for right and wrong everywhere. They are very practical about it, so they can adjust very well in abroad and mix with everyone. They don't want to change the world, go into politics all the time. when time comes they can be very selfish, and that's what makes them survivors in times of political changes. Yet they hold on to their moral views none the less, that's why you see vegetarian and non drinking Gujaratis around the world, who still manage to work with all sorts of people.

Basically, they have very good idea about how world works and they don't go head on to tackle troubles, they will just work their way around as long as they can.

Many people might not agree to this, but this is what i have observed. The Gujarati novel 'Dariyalal' will really give you unique insight of how they do business.

Today, there are over 130 private aircraft owned by Indians, scaling our skies, with the Gujaratis leading the pack. Industrialists Mukesh Ambani, Ratan Tata, Anil Ambani, Atul ‘Micky’ Punj, Gautam Singhania and KP Singh have their own jets. Nita Ambani got her own private number (an Airbus 319 Corporate Jet) from husband Mukesh on her 44th birthday, six years ago. Steel tycoon Lakshmi Mittal uses one of his many premium executive jets to get around three countries in a day. It’s not just the owners; executives of Tata Steel, GMR and Jindal Steel also use their company planes when on tight schedules.

India is a fast-growing private jets market in Asia Pacific. In fact, India outnumbers China and Japan when it comes to private jets. As compared to China’s 93 and Japan’s 76 private jets, India’s 130 plus private aircraft represent 12 per cent of the global market.

The Indian market is small but can grow further. In the next ten years, the worldwide market is set to touch $250 billion in size and the Indian market is pegged at $5 billion, which is just about 2 per cent.

Of the 130 private aircraft flying in India, Brazilian aircraft maker Embraer delivered 20 jets in the past six years. Its other models, the $4.6-million Phenom 100, and the five-seater Legacy 450, priced at $16.9 million with a seating capacity of about eight, are the most sought-after by businessmen.

French aircraft maker Dassault Falcon is betting big on its new Falcon 5X business jet priced upwards a neat $45 million. The company, which produces military, regional and business jets, is set to debut its new large-cabin, long-haul, large-body twin-jet Falcon 5X couple of years from now after receiving necessary certifications.

“We see improving signs of the Indian market, which has been slow recently. India has a real need for expanding business aviation and we remain bullish about future market prospects,” says Gilles Gautier, vice president, Sales Europe, West Asia and Africa, Falcon. The company has 22 large-cabin, long-range private aircraft in service in India. The new orders are for the longest-range Falcon models capable for flying non-stop to London from anywhere in India, says Gautier, who has high hopes from Falcon’s 7X, priced $52 million.

The US-based aircraft maker Gulfstream flew its G650 business jet for the first time in India at the India Aviation 2014, in Hyderabad. With luxurious interiors, the aircraft can seat up to 10 and is priced at $65 million.

“As the economy improves, we anticipate that the demand for business jets will increase too,” says Jason Akovenko, regional vice president (Asia-Pacific), Gulfstream Aerospace Corporation, that has 20 aircrafts in Indian skies.

An important aspect customers need to consider is the cost of parking their jets, something which can only be done at large airports like Delhi, Mumbai and Bangalore. Besides, owners also have to count charges for ground landing, which depends on factors such as the aircraft’s weight, landing time and duration of use of parking facilities and the number of seats. Of utmost priority is getting regular inspections and maintenance to ensure the jet’s continued airworthiness, which also comes at a cost.

Buying your own jet should make business sense. Profitability depends on how many times one will need to fly to justify the investment, and if it saves both time and costs. Things like operational expenses such as fuel costs, maintenance, airport fee, pilot salaries, insurance that need to be factored in.

The Tyrus Wings Try Before you Buy Private Jet Program is also making leeway onto the Indian market. This is a great solution for a company or HNWI who isn’t quite sure which aircraft model to buy. They will basically lease a jet, with crew for 6 months and see how they get on. At the end of the lease they can either buy or try another type for 3-6 months.

Overall, India’s new business friendly government, lead by Gujarati entrepreneur turned Prime Minister Narendra Modi and the low price of oil, is setting India up for a Business Jet boom in 2015 and beyond.

Fabrizio Poli is an Aviation Analyst & Managing Partner of Boutique Aviation Company Tyrus Wings. He is also an accomplished Airline Transport Pilot having flown both private Jets and for 5 different airlines. Fabrizio is also a bestselling author and inspirational speaker. You can tune in weekly to Fabrizio's business Podcast Living Outside the Cube. Fabrizio can be reached on Email: [email protected]