New Delhi airport, which offers a modern terminal for airline passengers, plans to add FBO facilities to encourage growth of private charter business.

Brokers and operators seek partnerships to build business

India is a market with vast potential, and both brokers and charter operators are working to develop links and joint ventures with international partners to maximise their business levels.

Delhi-based Multi-Track Air Charters is seeking venture capital partners to launch a sister private charter operation to build business in time for an anticipated Indian economic upturn in autumn 2010.

Capt. Viren Gupta, founder and ceo of the air charter broker launched 13 years ago, says India has vast potential for charter operations. "Multi-Track Air Charters intends to be ready to launch the new division in July or August ready for peak tourism demand from September so we are starting work on putting the finance and operational plans into place now. We are in a good position because we did a great deal of work just before the global economic downturn came along and it became sensible to postpone the diversification to a more favourable launch date."

The company's priority for a new charter operator fleet is fixed wing. "The initial investment should be firstly in a small jet and then in a King Air although there is also a good market for a helicopter," says Gupta. "Our detailed plans envisage an initial investment of US$7 million to US$15 million in a fleet that would operate under the established and well-known Multi-Track brand. However, we note that charter operators with aircraft under-used in Europe are interested in joint ventures and this may be an alternative or complementary way of growing business."

The Indian aviation sector has witnessed growth and investment since the government's open sky policy began to take effect, but private charter is still very much in its infancy. Gupta says: "Multi-Track has built a broad base of business over the years but, obviously, the profit margins in charter are higher than those inherent in commission-based air charter brokering." He points out that there is also an imbalance in demand for broker and charter services in the Indian market. There is a good demand from international brokers and charter operators for reliable broker connections within India. However, demand for flights out of India to foreign destinations is comparatively limited.

"Outward travel hasn't taken off in a big way and, although this might develop in time, the prospects for developing a charter business in India are much more attractive," Gupta adds. "We benefit much more from link-ups with charter brokers in the United States, Europe and the Middle East. Areas of demand and enquiry include serving the needs of politicians and diplomats. Last year film star Michael Douglas visited India and there is a good corporate demand provided by international companies who wish to do business in many sectors of our economy."

Gupta, a former fighter pilot with civil aviation experience, says that the charter broker sector might benefit from an insistence on qualifications. "A knowledge of aircraft and their safe operating needs and procedures are obviously among key requirements but, at present, air charter brokers can enter the business without these basics."

Rupesh Raghavan, ceo of Arc One Air Charters Pvt Ltd, says that brokers operating within India have to work hard to establish trust in the charter industry. "The key is transparency. The successful charter broker will need time to establish the confidence of the client in ways of working and corporate ethics."

But he adds: "We are looking for international charter brokers who need charter services in India for their clients and vice versa wherein we can provide a charter service in India and we can also market charter services internationally through them."

Raghavan says brokers need to offer more transparency on the make and past track record of the aircraft as well as proper and professional handling of client requirements. "This goes a long way in making you a successful air charter broker in India. " 

Arc One Air Charters is an offshoot of Travel Safe India which was established in 2004. Travel Safe India provides transport and logistics services for oil and gas related activities across India. "These activities encompass all possible transport of men and material to these remote areas by scheduled and non-scheduled air, road and rail transport resources," Raghavan says.

The company has ferried politicians to mark the gas discovery in the KG Basin, off the east coast of India and benefited from national elections in India. Several helicopters were utilised for campaigning.

Raghavan confirms: "India is at a nascent stage as far as aviation is concerned in general. However, the size of the market is huge even at this stage. India presents unique challenges and has a lot of bottlenecks that curtail the growth. However, the good news is that they are being addressed by the government and the concerned authorities."

He adds: "The lack of dedicated charter airports and terminals in key and busy airports such as Delhi and Mumbai takes the shine away from the charter services. The fact that runways need to be shared with scheduled passenger jets leads to unwanted and unavoidable delays at these busy airports. The lack of helipads in the city also leads to a lack of opportunities for helicopter charter services."

But there are opportunities to grow business. "These include religious charter service. Since most religious places are located in remote areas, getting to these places requires specialized helicopter charter. Also with the growth in infrastructure projects in remote areas of the country, air charter service are the only possible way for men and material to reach these places." The government is addressing the issue of helicopter charter within cities and smaller airfields in remote areas, serviceable for charter companies, are being identified.

"There is a good demand from businesses that are spread out geographically and need to travel to two or three destinations daily where there are no airline hubs and Arc One has responded by providing air charter services across several cities in India, especially in locations which have poor scheduled aircraft connectivity." Raghavan adds: "We have introduced a frequent user card for individuals and corporates."

Premair, a helicopter charter company operating out of Indira Gandhi international airport in New Delhi, confirms that politics, religion and business are three sectors providing good demand. 

It operates a Bell 230 and a Bell 407. The company's HS Waraich confirms: "Corporate leaders, tourists and people performing pilgrimages to religious sites located at high altitudes and areas difficult to access by conventional forms of transport provide strong demand."

India is a difficult market that requires good connections, so for the international broker without offices in India, a 'broker's broker' appears to be essential. Multi-Track's Gupta says: "I, of course, use brokers with good local knowledge for countries where I don't have representation. Over the years such contacts build into a reciprocal network. India is a country where local knowledge is particularly essential to ensure a favourable trip for the client."