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Air charter not just for Ambanis and Bachchans

Charting a plane works out cheaper. For instance, a Delhi-Kuala Lumpur trip will cost Rs 9 lakh (for a 7-seater plane) while a Delhi-Tirupati trip will cost Rs 3 lakh.

Sep 12, 2007, 04.29 PM IST
Manav Singh,
Managing Director, Club One Air
Fly whenever you want to, wherever you want to. No, you don’t have to own a business jet for it, all you have to do is become a fractional owner (i.e, rent an aircraft for limited time) of an aircraft. But are Indians prepared for this kind of next generation business travel? Manav Singh, managing director of Club One Air, a non-schedule operator offering aircraft fractional ownership and charter services.

Has the concept of fractional ownership taken off in India?

The concept is not very popular. High net worth individuals need to be educated about it. Also government regulations don’t allow fractional depreciation benefits to be passed on to the fractional owners. We have 50 members who have opted for fractional ownership of aircraft so far. These owners can use their flying hours at their discretion.

By fractional ownership we restricted our consumer base. Now, we are targeting the mass market by focusing on air charter rather than only fractional ownership.

For fractional ownership of an aircraft, an owner has to bear three kinds of cost —ownership costs, fixed costs and flying charges depending on the stake you want in the aircraft. For instance, for an aircraft costing Rs 20 crore, your share for 1/6th ownership will be Rs 3.33 crore. If the cost to maintain an aircraft is Rs 15 lakh per month, your 1/6th share of fixed costs will be Rs 2.5 lakh. Also you will be billed for each flying hour.

Charting a plane works out cheaper. For instance, a Delhi-Kuala Lumpur charter will cost Rs 9 lakh (for a plane seating seven people) while a Delhi-Tirupati trip will cost Rs 3 lakh for seven people.

Are you expanding the fleet?

We have nine aircraft — six Cessna aircraft, two Augusta helicopters and one Challenger. We will be inducting 6-8 aircraft by 2008, investing more than Rs 100 crore. The expansion will be mainly funded through debt.

We would be sticking to the same type of aircraft and inducting more Cessna aircraft. We are also looking at very light jets. Some companies manufacturing very light jets are Adams Aviation, HondaJet, Eclipse Aviation and Epic. A very light weight jet can cost anywhere between $1.5 million to $3 million. An air charter company starts making profit only after it has more than 15 aircraft. One needs volume to make money in this business.

Air charter is growing at a rapid pace. What are some of the issues it’s grappling with?

This is a highly under developed market. People need to be educated that flying by charter is not a very expensive affair, considering the fact that disposable incomes have increased in recent times. Air charter is not only for the Ambanis, Modis, Bachchans and the likes. It can be used extensively for pilgrim tours and medical evacuation.

Like general aviation, business aviation too is facing infrastructure issues. Airports don’t have a separate terminal for charters. Getting hangars, too, is a problem.

Also there is an acute shortage of pilots in the industry. Though getting co-pilots is not a problem, getting commanders is. Air charter companies, too, are hiring expats. Of the total 24 pilots that we have, eight are expats.

Besides air charter and fractional ownership of the aircraft, which are the other allied services you are focusing on?

We are looking at opening a pilot training school. We have also started a cabin crew institute for business aviation in Delhi, focussing more on hospitality, as business aviation offers first class services.

Around 400-500 business jets will be bought in next three years by Indians. To cater to the needs of this business aviation community we have started an aircraft maintenance and management program. We will help them identify the type of aircraft they should buy, will assist them with formalities, clearances and also maintenance.
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