Page last updated at 00:12 GMT, Friday, 26 March 2010

India's private planes and helicopters take off again

By Delnaaz Irani
Presenter, India Business Report, BBC World

Helicopter in Mumbai
Aircraft and helicopters grounded during the recession are flying again

If you want to see some of India's most powerful and influential businessmen, head over to the private helicopter pad at the Mahalaxmi Race Course in Mumbai.

While standing outside in the 30-degree heat, waiting for our own helicopter to arrive, we see the likes of Anil Ambani and Gautam Singhania whisk past, hurriedly ferried on and off their helicopters.

The combined net worth of these two Indian businessmen alone is $15bn, roughly equivalent to the economic output of Ghana.

While we gaze in amazement, the local security guard shrugs his shoulders and explains that this sort of air traffic is not that uncommon.

"Many powerful businessmen arrive here in helicopters several times a day", he points out in Hindi.

He also says he has noticed a sizeable increase in the number of private aircraft taking to the skies.

Increase in demand

According to the latest industry reports, the frequency of private planes or helicopters taking off has gone up significantly over the past few months.

Many in the industry are now expecting year-on-year growth of up to 20%.

Mr Pradeep Thampi is among those who are optimistic about the future again.

Pradeep Thampi
Pradeep Thampi says aviation infrastructure should be improved

Sporting dark glasses and a serious demeanour, the well-suited, grey-bearded businessman has worked in the industry for 16 years.

His company, Executive Airways, runs a fleet of over 15 aircraft, chartering out private jets and helicopters to companies and individuals.

He has experienced the highs and lows of the industry first-hand and explains just how tough things got last year.

"Most of my aircraft were grounded during the recession as companies stopped spending altogether. It was a really bad time. But suddenly in the last couple of months, there has definitely been a change. Companies are spending again and there's definitely been an increase in demand for our services."

Prices reduced

The propellers soon start spinning, and I lean back, comfortably strapped in on board one of Mr Thampi's private helicopters.

As the aircraft picks up speed, we are soon soaring over the slums of Mumbai and whizzing past the city's congested traffic ways.

The starting rate for an hourly rental of one of his aircraft is about 80,000 rupees, roughly $2,000.

I peer down toward the slums and realise that many of those who living just below me could not afford a trip like this in their lifetime.

Even though it is not the slum dwellers that businesses like Mr Thampi's target, many of his competitors were forced to slash their prices last year, in an attempt to boost demand.

According to some reports, prices across the industry were reduced as much as 40%.

Experts agree that this is one of the reasons why demand has picked up, but there are other factors at play as well.

Infrastructure improvement

Planes in Mumbai
The Indian government plans to invest 80bn in aviation over next 10 years

The aviation industry's growth is typically pegged to a country's economic growth.

With India's economy now returning to higher growth levels - the Government is forecasting GDP growth of around 8.5% for the financial year 2010-2011 - it is not surprising that the industry has also received a boost.

Nevertheless there are concerns over whether this growth can be sustained.

"Infrastructure for the general aviation industry has to be improved quite a lot, says Mr. Thampi, raising his voice to be audible over the noise of the helicopter.

"We do not have a proper training centre for the pilots or the engineers. We do not have a good warehouse where we can get spare parts, whenever the machines go on ground. There aren't even enough airports for us to use either."

Mr Thampi's concerns are shared across the industry. There is no training provided for helicopter pilots anywhere in India.

For many private charter operators, it means that they are forced to pay more to hire expatriates or retired Air Force pilots.

Government investment

Training is just one of the areas in the industry that needs attention and investment.

But despite its problems, Mr Rajeev Batra, Executive Director of KMPG, says that India's general aviation sector has a huge potential for growth.

"To draw comparisons, US has close to 150,000 to 160,000 planes devoted for general and business aviation. As compared to 300-400 planes in India for a one billion population, so that's the opportunity."

The investment the industry so desperately needs may be coming sooner than expected.

The Indian government has announced it will invest $80bn over the next ten years in India's aviation industry.

If the money is well spent on the right sort of infrastructure, it could see a boom in the skies and the industry soaring for some years to come.



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