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Critical need of policy and regulatory reforms for business aircraft sector

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Sudipta DevMumbai

Jayant Nadkarni

The last two years have been particularly challenging for the business aircraft sector in the country, which has witnessed a slowdown. “This negative growth needs to be rectified immediately through a clear policy framework, and with commitment from government and industry stakeholders, for the sector to emerge as a major driver of economic development and connectivity. Our sector at the moment is in dire need for some key policy and regulatory reforms,” said Jayant Nadkarni, president, Business Aircraft Operators Association (BAOA). Though the sector cumulatively holds three times the fleet of commercial airliners in India, however it has never been given much importance by the government and regulators. “They see us as a luxury segment, not realising the ways it actually contributes to the economy, enables connectivity, industrial works, medical evacuations, tourism, etc,” rues Nadkarni. The market size of the industry is estimated to be approximately Rs 2,500 crore. BAOA has in fact commissioned a study to map and determine the sector’s growth, it’s size, turnover and contributions to the Indian economy.

The sector, according to Nadkarni, suffers a major perception problem that has resulted in nonexistence of a separate policy framework.  “We also have to face punitive taxations and lack of infrastructural support,” he stated, adding that, the tax regime on import of general / business aviation aircraft needs a complete relook. “The current policy includes a Countervailing Duty, which is illogical as there is no domestic civil aircraft manufacturing in India. We need the government to view that an individual or company importing an aircraft is not doing this just for luxury, but also to use it as a business productivity tool, which can only be good for the economy,” asserted Nadkarni.

A uniform and lower duty on both non-scheduled air operators (NSOPs) and private category would give a fillip to import of business aircraft.  This will lead to many advantages – from additional revenue from service tax to the government to enhancing remote and regional connectivity. “Increased local aircraft numbers will allow local MROs to justify in-house investments into heavier maintenance capabilities.  Currently, all Indian business aircraft fly to other countries for their heavy maintenance checks.  Finally, there will be increased direct as well as indirect employment and development of other sectors such as hospitality and tourism,” added Nadkarni.

Insufficient infrastructure is one of the biggest deterrents for the sector. “The indiscriminate and unregulated airport charges being levied in terms of ground handling, hangarage and parking needs to be rationalised immediately,” mentioned Nadkarni.

BAOA  is looking at increasing interactions with all concerned stakeholders and also work on the adaptability of safety standards for business / general aviation in the country. It is also strengthening various internal committees, which will work towards achievement of specific objectives.

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