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Biz aircraft sector buffeted by taxes, regulation

Last Updated 11 March 2014, 17:19 IST

The government thrust on regional connectivity is the only saving grace for the business aircraft sector wilting under heavy taxes and regulations regime, said Rohit Kapoor, president of the Business Aircraft Operations Association.

Speaking to reporters on the eve of the India Aviation Show 2014, Kapoor said that the business aircraft sector with sales potential of Rs 12,000 crore has seen deteriorating performance year after year to register growth below 1 per cent in 2014.

Although there are 450 airports in the country, hardly 130 are fully operational and this is a gap which the business aircraft sector could fill, Kapoor said.

He made a fervent appeal to the government  to reduce customs duties and other taxes and also review policies and regulations to encourage the business aircraft sector.

“Don't look at this sector  just as an personal indulgence of corporate honchos, but  as a sector that could provide alternate connectivity in the country along with chartered and scheduled flights,” Kapoor said.

There is heavy demand for chartered flights and helicopters during the current election season for campaigning and movement of VIPs. Because of the neglect of the business aircraft sector, corporate owners are either selling off or going in for a change of image to avoid government harassment, Kapoor said.

“While 13 aircraft were bought in 2013, 19 were sold off, not to mention the many cancellations and postponements of acquisitions,” Kapoor said.

Including NSOP (Non-Schedule Operator Permit) aircraft numbering 565, there are less than 1,000 aircraft now as against the projected 1,793, he said. “We projected 12.5 per cent growth in 2011 and nearly $45,000 turnover, but have hardly touched 6 per cent growth and less than $20,000 turnover.”

Kapoor said the sector’s potential lies in providing connectivity to segments like public sector industries, mining, medical, tourism and disaster management, among others.

He blamed the restrictive nature of regulations for only 21 MRO (Maintenance and Repair Overhaul) facilities emerging in the country against the projected number of 53. “Fifty per cent of the MRO business in India has been going to countries like the Philippines,” he said.

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(Published 11 March 2014, 17:19 IST)

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