India’s Growing Fortunes Fuel Appetite For Private Jets
A record harvest of wealth in India - more than 50 billionaires in the Forbes 2011 World Rich list and hundreds of multi-millionaires - is fueling an insatiable appetite for luxury goods from villas and fast cars to the ultimate symbol of status and power - a private jet.
"India is poised to be among the top five private aviation markets in the world. Even assuming a modest 12.5 percent growth, which is less than the average achieved in the last five years, India will triple its fleet of private jets by 2020," says Karan Singh, Vice-President, Business Aviation Association for India (BAAI).
In 2006 there were 335 private planes in India - 170 fixed-wing planes and 165 helicopters. In 2010 the number was 552 planes, comprising 270 fixed-wing aircraft and 282 helicopters, according to Singh.
Nothing demonstrated the buoyancy of India’s private aviation market more than the recent World Cup cricket semi-final held in a small north Indian town of Mohali. So many rich boys with their flying machines descended on its tiny airport that about 70 of these planes had to be diverted to neighboring airports to park.
Little wonder then the world’s biggest business aviation companies like Canada’s Bombardier, Brazilian Embraer and US-based Gulfstream, Hawker Beechcraft and Cessna want a piece of the Indian market.
Hawker Beechcraft entered the Indian market in 2007 by appointing Interglobe as its exclusive representative and Gulfstream came in via Arrow Aircraft as its independent sales representative in 2011.
“No Maybachs, Rolls Royces, or Ferretti yachts can match the style statement of a private jet because here we are talking of costs that could range from $9 million for a mid-sized executive jet to $ 70 million for an Airbus customized plane, possibly more expensive than the most expensive villa in the world,” says Rohit Kapur, Managing Director, Arrow Aircraft.
Cyrus S Poonawalla, Chairman of the Serum Institute of India and one of India’s richest men was recently quoted as saying, “ I wanted to buy a small budget turbo prop but my friends insisted that I go for the kill.” So he acquired a Cessna 560 XL citation jet. It has been embossed with his initials and carries a horse monogram as his personal stamp.
In 2007 when Mukesh Ambani, Chairman and Managing Director of Reliance Industries, busted the list of the world’s richest men surpassing Bill Gates, and Warren Buffett, he thought it a befitting style statement to gift his wife Nita Ambani a private plane on her 44th birthday. Brother Anil Ambani, Chairman of Reliance Anil Dhirubhai Ambani Group, soon followed suit buying a Bombardier Global Express, putting him in the league of the likes of Bill Clinton and Steven Spielberg.
Mukesh Ambani’s Airbus is custom-fitted with an office, a cabin with game consoles, music systems, satellite television and wireless communications. Indian billionaire Gautam Singhania, head of fashion retailer Raymonds, has his plane’s interiors done by Eriic H. Roth, owner of Ronkonkoma, N.Y., which specializes in crafting luxury insides for high-net-worth plane owners. And construction company Punj Llyod’s Chairman Atul Punj’s Gulfstream jet has a shower and living room.
But the Indian private aviation market is not just about power and pelf, say corporate jet owners. “ I fly 30 hours a month, sometimes to more than three cities in a day. Using a commercial plane would mean being at the mercy of flight schedules. With my Bombardier I can be more efficient with time and work. I look at it as a utility, rather than a lifestyle statement,” says Singhania.
BK Modi, Chairman of technology conglomerate Spice Global, says, “ I have operations in 90 countries from Ivory Coast to Indonesia and 13 houses all over the world. So I charter planes for up to seven to 20 executives when the flying time does not exceed three hours. A private plane offers privacy, time flexibility and work-on-the-go.”
So convinced is billionaire G.M. Rao, Chairman of infrastructure group GMR, of the need for private planes that he floated GMR Aviation in 2006 with a fleet of five Falcons, Hawkers, and Bell helicopters to cater to the charter market. The company’s private planes log in an average 45-50 hours of flying time a month.
According to the BAAI, scheduled airlines service less than one-third of the airports on a regular basis. Add to this bad roads and poor surface transport infrastructure and the demand for private aviation is bound to boom. In the last five years, more than 10 aviation companies have come up in the charter market. Prominent among these are Religare Aviation, Kingfisher Elite, GMR Aviation, in addition to 15 smaller companies. It costs between $3,000 and $7,000 per hour to charter a plane depending on the aircraft size.
"Bellary - a small, dusty mining town in Karnataka - where newly minted iron ore fortunes are fueling demand for private jets could soon account for 10 percent of the whole market in India."
The private jet market in India is not limited to the lifestyle needs of individuals or corporations alone. Demand is rising from non-conventional customers and unlikely locations. “We expect Tier 2 and Tier 3 cities to propel the market,” says a spokesperson for Interglobe.
Guess then which town in India is tipped to be the aviation capital of India? It’s Bellary - a small, dusty mining town in Karnataka where newly minted iron ore fortunes are fuelling a demand for private jets that may soon account for 10 percent of the whole market in India.
Pune, in the western Indian state of Maharashtra, once considered a sleepy education town, today has the third-largest ownership of private jets, thanks to the city’s metamorphosis from outback to global auto hub.
Last year an exhibition 'My Plane,' in Ludhiana, a town in the north Indian state of Punjab, which is also known as the ‘Manchester of India’ for its yarn industry, saw as many as 40 queries from industrialists and businessmen for Mustang, the entry-level jet put up for demonstration at its Sahnewal Airport.
As India’s wealth and its rich expand beyond the metros into the heartland, private jet merchants are also flying in with their wares.