Jupiter Aviation shelves business aviation plans, blames high entry costs

Bangalore: Jupiter Aviation appears to have shelved plans temporarily to start a charter and fractional ownership company PrivateAir, saying that the business was not a viable proposition. Early on in the year, in February, the company had indicated during the AeroIndia 2007 show at Yelahanka, Bangalore that it may like to launch operations with a fleet of five fixed-wing aircraft and two helicopters. According to Ravi Narayanan, chief executive of both companies, the plan has now been suspended due to high taxes on aircraft imports into India.

"The taxes increase the cost by up to 30% and that's simply not feasible. It's not right that we are charged the same taxes as scheduled airlines. The charter or fractional ownership business is not viable due to the high barriers to entry," said Narayanan. "PrivateAir will not take off as a charter or fractional ownership company for now, though we will continue to monitor the market," he added.

Though there is a growing shortage of business aircraft in the country, especially in the face of booming demand, high costs, restrictive rules governing the use of airspace and airports, and a shortage of proper infrastructure are acting as a block to the growth of the business aviation market.

However, Jupiter is growing its business in other segments of the aviation sector. Recently, it announced a tie-up with European aerospace major, EADS, as it's exclusive partner in India for commercial aircraft maintenance, repair and overhaul and life cycle support operations.

At the start of the month, it signed an agreement with state-owned airline Indian, to start an MRO facility for Airbus A320 and ATR aircraft in New Delhi.

There is also likelihood that EADS and Jupiter could invest around $100 million in a freighter conversion facility for Airbus passenger aircraft.

Jupiter also has plans to set up four aviation schools in India in collaboration with EADS, where it aims initially to train up to 150 pilots and 1,200 aircraft maintenance engineers from India annually. The first of these schools is likely to begin operations in October.