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Urgent trip? Just fly by hire
Harichandan A A | April 07, 2005
Necessity had always made air charters the first choice of transport in some businesses such as offshore oil exploration or moving top politicians and corporate executives around.
More often than not, such people/businesses have owned their own aircraft, chartering them out when not in personal use. This helped bring down the operational costs of the aircraft as well, for particularly helicopters were expensive to own and run.
More recently, however, private firms, whose main business is air charter, are beginning to make money with ferrying people around.
Soon, outbound international charters may also make their presence felt here, while incoming tourists and businessmen have used charters before.
"In 1997, when we started as a pure air charter company, the accent was still on fixed wing aircraft (airplanes)," says Jayanth Poovaiah, a director of Bangalore headquartered Deccan Aviation Pvt Ltd and head of its air charter business.
Airplanes are still very much in the business today but helicopters, which don't need airstrips, have caught up and are growing modestly in numbers.
"There were about 85-90 helicopters in the country in 1997 and a fourth of those were owned by public sector Pawan Hans," Poovaiah said.
Now there are over 150 helicopters. Deccan Aviation also plans to add three helicopters, two turbo props and two business jets to its fleet of nine helicopters and two airplanes, he says.
Khusroo Rustumji, chairman of Taneja Aerospace and Aviation Ltd, says there are also some 60 fixed wing aircraft in the air charter business in the country.
"Also, there are 400 airstrips in the country, including the unmanned ones such as the one in Mysore. You can land there and in 20 minutes a car gets you to town."
So, how much business might there be for these 150 helicopters and 60 airplanes? "The industry seems to be growing at between 30 per cent and 40 per cent by volumes every year over the last three years," says Rustumji.
Deccan's last year's business is also indicative, though rates and contracts would vary. For the fiscal 2004, "We flew about nearly 5,000 hours, which roughly translates to about Rs 40 crore (Rs 400 million) in revenues," says Poovaiah, for his 11 aircraft.
Rustumji, whose firm has six piston engine aircraft, says hiring airplanes is cheaper. Chartering airplanes can cost between Rs 25,000 and Rs 30,000 an hour for the entry level piston engine aircraft and up to Rs 200,000 an hour for business jets. And where is the business coming from?The industry may have generated, with help from the media, hype about helicopter trips as Valentine's Day gifts or young IT professionals proposing to each other literally in the clouds or even in one sweet instance a young woman gifting her father with a helicopter ride on his birthday.
But, the bread-and-butter business still comes from corporate and government contracts. Large corporate customers, such as the Kalyani group or Sundaram Fasteners even go for fractional ownership -- such as a time-share holiday, of airplanes. "So say if you buy 25 per cent of a plane, you get to fly 100 hours on it," said Rustumji.
Poovaiah says, "The only certainty in this business is the outgo including instalments on loans, lease rentals, insurance premium and salaries. On top of that, this industry is very susceptible to the vagaries of the market. While the SARS epidemic hit charters, the tsunami boosted their business."
So secure contracts, for business up to two to three years ahead, ensure that the air charters keep flying.
Contracts come from different sources, from television channel NDTV to the Vaishnodevi Shrine Board to the Jharkhand Government to Cairn Energy.
That said the Valentine's Day specials and no-occasion joy rides for families are increasing as air charter firms advertise themselves available for just about any activity.
To put things in perspective, however, the US has some 6,000 charter aircraft owned by big and small operators. For that to happen in India, which it can if industry enthusiasts are to be believed, several things are required including in the long run a robust helicopter manufacturing capability within the country for importing them is an expensive affair.
Private firms such as Deccan Aviation have had virtually no interaction with Hindustan Aeronautics Limited, for its Advanced Light Helicopter. Their main worry is a lack of track record, which makes for a bit of a Catch 22.
"If the product is good and made in India, that's great, but we don't want to buy just because it is domestically produced and later pay heavily for lack of spares or services," Poovaiah says. "With Bell, or Sikorski, I can get spare parts from Singapore in 24 hours through a phone call."
Aeronautics experts, who in India come largely from the public sector, have argued that the ALH is indeed best-in-class and government support for an initial production run of some 300 helicopters would make all the difference.
This might yet happen, with HAL straddling multiple partnerships, with the French, the Israeli and the Americans in different areas related to helicopters.
Small, easily rectifiable problems exist too. By definition, charters are non-schedule flights and by law air charter firms can't publish timings or sell tickets.
Their attraction comes from the flexibility, and quick turnaround times they offer. All this will come to naught if an airfield isn't open. Many smaller ones are on call, or need a few hours to a day's notice.
"There are helicopter friendly states, such as Karnataka, and some not-so-friendly ones where we have had to approach the government to clear landings." A unique problem in India comes from landing in rural areas, where "the people are so fascinated with the birds that they want to come up close and even touch it." So, "we may need some security," he says.
The most exciting opportunity for private ventures may however come from outbound charters, which the travel industry is keen on.More Indians may want to combine business and pleasure and in time their volumes will need charters to fill the gap between seats available on scheduled commercial flights and actual demand for flights to international destinations. Starting nearly 18 months ago, the government has continued to help this happen, though slowly, slowly.