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India a hot market for corporate jets

A booming economy and a general upswing in the aviation market have thrown open a major opportunity for large aircraft manufacturers, reports Gaurav Choudhury.

india Updated: Dec 15, 2006 21:33 IST

Business class is passe, business jets are in.

A booming economy and a general upswing in the aviation market have thrown open a major opportunity for large aircraft manufacturers Airbus and Boeing to tap an emerging market for corporate jets in which India has turned out to be a hot new destination.

The Airbus Corporate Jetliner (ACJ) Family, which includes the A318 Elite, Airbus ACJ and A320 Prestige models, has established a strong presence at the upper end of the business-jet market with 80 sales to date from global customers since the business took off in 2001.

Of these, 22 deals have been clinched in 2006, giving them their best year ever. All of the sales are for the Airbus ACJ Family aircraft, except for one VIP A330-200 to an undisclosed customer.

Airbus spokesman David Velupillai told Hindustan Times that "several" of these were for Indian customers, compared to a "handful" for Chinese buyers. Exact numbers are not disclosed, but industry officials say that "several" usually means more than 10.

Airbus delivered seven corporate jets in the first half of 2006, including the first for a US-based customer, Pharmair of Florida, and the first for an Indian customer, Vijay Mallya's UB Group. Reliance Industries also owns an ACJ family aircraft, industry sources say.

Similarly, Boeing Business Jets won 14 orders in 2005. "As of December 14, we have won 19 orders this year, nine of those are for our widebody VIP airplanes," a Boeing spokesman told Hindustan Times.

"We have sold four BBJs in India, three within the last year," the spokesman said, but refused to divulge the names of the customers.

The number of corporate jets in the country is expected to double to 300 in the next 18 months, industry officials say.

While the price range of Boeing Business Jets (BBJs) is between $48 millionand $64 million, those of the Airbus series range between $45 million and $65 million.

However, both Boeing and Airbus command a small market share in the corporate jet business, unlike in passenger jets. Industry officials say Indian buyers may also have sourced from other jet-makers such as Brazil's Emrbaer.

According to the General Aviation Manufacturers Association (GAMA), which groups 50 leading aerospace manufacturers, global shipments of business jets during the first nine months of this year totalled 629, a 23.3 per cent increase over the 510 units delivered through the first nine months in 2005.

"Our manufacturers have seen growth in all airplane segments, part of which we attribute to strengthening sales in Europe, and into Russia, China, and India," said Pete Bunce, GAMA’s President and CEO.

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First Published: Dec 15, 2006 21:33 IST