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Friday, June 1, 2007

Eye on India: Putting Out the Welcome Mat

Commercial helicopter operators in India are bracing for an onslaught of competition as foreign operators enter the market.

Triggering their concern is the national government’s stated intention to lift or even eliminate the cap on foreign investment in Indian helicopter operators. India’s civil aviation minister, Praful Patel, revealed those intentions April 23 at the start of a three-day U.S.-India Aviation Partnership Summit. He said the government was keen to attract more private participation in the helicopter sector as a means of boosting its growth and the development of civil aviation infrastructure.

The government already allows 100-percent direct foreign investment in the development of new, airports, he noted.

"We want to see a much more liberalized regime," the minister said. "We want to connect India from within in a very meaningful way. The government will continue to liberalize this sector, as there are constraints in infrastructure."

India is widely considered to have great potential for growth in aviation, and for vertical-lift aviation in particular. The nation has a population of roughly 1.1 billion people. But as Col. Jayanth Poovaiah, executive director of Deccan Aviation, notes, less than 1 per cent of Indians take one air trip annually. Deccan Aviation claims to be India’s largest private-sector charter aviation company, with a network of bases spanning seven locations across the country. It serves the corporate, offshore, tourism, and emergency medical services, as well as the film and electronic newsgathering, aerial reconnaissance, and disaster-management operations

The Indian market already is growing, noted K. Sridharan, retired air vice marshal and president of the Rotary-Wing Society of India. "For a second year in a row, India has experienced a 25-percent increase in domestic passenger traffic and more than a 15-percent increase in international passenger traffic." He said projections of the International Air Transport Assn., which tracks and analyzes airline traffic trends, indicate that India’s total air traffic volume will grow by 15 percent annually through 2009.

In his comments, the civil aviation minister said he was optimistic that India could sustain annual growth of nearly 50 percent in passenger traffic in the domestic sector and 20 percent in the international sector.

Poovaiah said that in the next 10 – 15 years, India is likely to witness a compound growth rate of 25 percent in the aviation sector.

While those numbers refer to airline traffic, prospects for rotorcraft are bright, too. Sridharan said that while that sector has been neglected in India, it is still poised to grow at 10-12 percent a year.

"The usage of helicopters in the energy sector, especially in the offshore sector, is likely to double by 2010," he said. "Major helicopter operators are expanding their fleets because of increasing corporate and leisure demand. With increasing aspirations of the people, use of helicopters for public good — especially emergency medical services — will go up in a big way."

Serving all that potential traffic will require a lot more aircraft — some estimate the country will need 15 times more than the 320 or so aircraft it has today.

Given India’s diverse terrain, rotary-wing aircraft can play a critical role in building those domestic connections to which Patel aspires.

India is the world’s seventh largest country in land area. Its northern region has the Himalayan mountains and the third tallest mountain on Earth, 28,208-ft-tall (8,598 m) Kanchenjunga. South of those mountains is the great Ganges River valley, where millions of Indians live. Floods and typhoons often ravage this low-lying region. The two ranges of the Ghat mountains line India’s east and west coasts. A good portion of India lies between the Tropic of Cancer and the Equator. Monsoon rains from the southwest drench the country from June to November.

Naturally, the anticipated growth will require more pilots. Last year, the Apoorva Aviation Academy opened its doors in a suburb of Bangalore. In February, it ordered two Eurocopter EC120 trainers and an Enstrom 480B turbine and 280FX piston aircraft, which the Menominee, Mich.-based manufacturer said will be delivered as early as this month. Academy officials see an acute shortage of commercial pilots in India that will take 7-10 years to fill.

Building all that aviation capability will require equity. "It is a welcome step," Sridharan said of the plan to lift the foreign-investment cap. "When foreign operators move in, their arrival could sound a death knell for the inefficient helicopter companies in India. In a globalized economy, this step will certainly boost the growth of the sector."

Poovaiah is optimistic. "There is an assortment of big and small helicopter operators in the country," he said. "Increased foreign equity participation will result in funds infusion and possible tie-ups between Indian and established international helicopter operators. The development will augur well for the long-term growth of the sector and also help smaller companies sustain and eventually expand their operations."

As he sees it, the challenge before the airlines as well as government is "to expand in a sustainable manner and to develop an aviation industry on par with world standards."

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