Interview: Gp. Capt. R K Bali (Retd.) Managing Director, Business Aircraft Operators Association( BAOA)
The stakeholders of Business Aviation in India who operates aircrafts under Non Scheduled Operators Permit (NSOP) wants the government should give them the status of an organised industry so that their issues can also be kept at par with the scheduled operators. In a candid interview, Gp. Capt. R K Bali (Retd.) Managing Director, Business Aircraft Operators Association( BAOA), talks with Vishal Kashyap, Managing Editor, Aviation World about the key initiatives taken by his body with the MOCA which is yielding good results, but still some loose screws need to be tightened and requires prompt attention by the policy makers and regulators for holistic growth of the sector.
How do you analyze the business aviation market post pandemic? What steps are being taken for the sector to grow up to its potential?
After the pandemic there is so much growth, so much of demand that the charter or the private flying that we need to tap on this demand and going forward to optimize the business aviation which I means to charter the aircraft, to own the aircraft, for making business more efficient , more cost effective. And, one way of doing that is seeing that the growth is as per the potential which can only be achieved if we do some consolidation in the industry. And one thing which we are recently doing & accepted by the ministry on 10th October 2022 was the fractional ownership which is just quite a different model than what it was earlier . We have seen what lessons even US has learnt from it . Because they have started somewhere in 2004 and 2005.We have recently issued guidelines and see that going forward. These are:
(i) Fractional Ownership: Through fractional ownership, one can reduce the cost of owning & operating the aircraft. Thereby, more growth will take place because people will be spending less money on the aircraft which they use to do it before.
(ii) Rationalization of Taxes: The custom duty or import duty which is very high on private owning , that is 28 % + 3% cess, which adds to 31 %. We have already taken up by the ministry and they are quite convinced because there has been hardly any import. There is no point having such a high tax barrier that doesn’t allow the aircraft to be owned in the private category. Our recommendation to the ministry is to rationalize it and make it 12 % while for NSOP its 5 % which is ok. So, this is the change that we are trying to bring.
(iii) Affordability of Airport Charges: The business aviation operates all over India as chartered or private operation under NSOP, they have so far been levied really unaffordable airport charges. We have taken it up and another step forward in this direction. By ministry agreeing and issuing directive to all the airports and AERA to make it itemized and we are further working on it to make sure that even the itemized charges are very reasonable and affordable. Though, the AERA adopts a soft touch approach to decide charges but they have to be comparable as you know ground handling is still not a regulated industry anywhere in the world. I was working on it till it became regulated as the workers are unlicensed. We have approached AERA and the government to have the charges rationalized as per the labor rates of skilled and semi skilled available, so that these charges are rationalized.
(iv) Infrastructure: First option which will become more important as our operations increase. So, for every new airport or modification or improvement of the airport, we have asked for separate General Aviation terminal to be made available for business aviation parking and which is there to happen especially at big airport. Till than, the government has agreed with our proposal to allow non-standard parking as per fees for which DGCA has also been told by the government to issue to accommodate more aircraft in non-standard bays so that safety concern are looked into and we are able to have more aircraft flying to destination to the busy airport where the business presently is going forward .We know that the business is going to come from tier 2 & tier 3 cities also. Right now, we are looking forward to have more FBOs coming up at those airports as we have also shared a concept on FBO with the ministry.
So, hopefully in the next 5-10 years when all the things will be in place with fractional ownership , tax rationalization and affordability of airport charges , we are sure that business aviation will grow to its potential in the coming years.
How do you see the concept of GIFT city and its benefits in long term?
The GIFT city was formed around three years back and it’s a very good step. In fact, we were lacking in that and that ’why government has come up with that. It’s a big initiative in the ministry specially the earlier Senior Economic Advisor Madam Vandana Agarwal who was spearheading this. There are some teething problems about banks getting actively involved to get lease rates or interest rates at very competitive rates near to what existing around the world. So, we are working on it and recently conducted workshop on it held by GIFT city head in Delhi in which secretary Civil Aviation also participated. Rest things are being discussed and going forward I feel there is lot of traction taking place there. But going forward I see that in next 3-4 years, GIFT city will be playing a major role in getting the aircraft imported at the rate at which people will not have to depend on other countries like Ireland and such states where people have been leasing aircraft. It is going to take time and as of now we are in the initial stages.
Any pertinent issue that you think still needs to be resolved at the ministerial level?
I would say that as of now the ministry is very open to any new suggestions or any progressive ideas. To meet this aim, they have formed the advisory group for small aircraft headed by the minister. There is a helicopter acceleration cell for small aircraft that meets every month. Issues will always come up, major or minor concerning as we start using the aircraft in more specialized role. For ex, like aerial work there will be some issues regarding how to regulate them. So, these are ongoing issues which will keep coming up but there is a system in place now through which we are now going to resolve it on a month to month basis and once in three months when we meet the minister. Then the directive is given by the minister on the final decision taken in that meeting. So ,all these ongoing issues is going o get resolved and we need to identify these issues, understand the real purpose of this issue and how we can address with mutual concern between the stakeholders and the regulator and we can move forward in almost all the issues.
What steps should be taken to enhance the training level in the BA sector?
As the fractional ownership grows with similar type of aircraft being imported for use, so there is a need for more simulator in India. At present, India is mostly depended on other countries like Singapore, Dubai and Europe for simulator training. So, in the coming years in India, number of simulators need to grow in a big way. And, other thing is standardization of training and given the training requirement, regulator concerning the training at par with the best global practices where to balance between what is the training requirement for safety and how we can make it more cost effective.
How you want to address regarding the tasks taken up by BAOA for its stakeholders?
BAOA is fully focused on taking up all the issues concerning all these stakeholders and we have this approach in our association that while the interest of the operator which is the core group of the industry is always kept in forefront. But we balance that approach with deep understanding which we try to develop of the issues which are affecting the other stakeholders also. Be it an airport operator, BCAS, DGCA, so we want to have a balance approach. That is where BAOA gets its recognition in the ministry as being one organization which is looking at the holistic growth of the BA industry in India.
