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Business charter segment loses altitude on fuel price hike news
20 June 2008

New Delhi: The fuel price hike has dented business in the business charter aviation segment as well, making the option of chartering a business jet or chopper more expensive.

The Business Aviation Association for India says that the direct cost of operations for any charter operator has jumped by around 35 per cent during the last six to nine months. Fuel, which earlier made up around 55 per cent of costs six months ago, now accounts for around 70 per cent of the operating costs of charter players. Consequently, established players in the business charter aviation space such as Pawan Hans, Taj Air, and Deccan Aviation have revised their rates upwards, by  10 15 per cent. Other players are mulling similar exercises.

Capt Karan Singh, president of the Business Aviation Association for India says that thus far competition ensured lower pricing, but the stage has arrived when there is no option but to increase prices. Business charters in India, or corporate flying as it is known otherwise, is already expensive in comparison to other countries. Charter flights in India cost around $8000 - $9000 an hour in India, compared to Middle East where a corporate business jet used for an hour costs around $6,000, and in the  US costs around $5,000. Fuel is not the only component of operational costs that are worrying charter players. Pilot salaries, maintenance costs, as well as catering is now dearer.
 
Taj Air's revised rates are now at Rs375,000 per hour, up from  Rs325,000 previously. Deccan Aviation too has added around 10 per cent to its charter helicopter services. State-run Pawan Hans is no exception either, having hiked rates for ad-hoc customers between 10-15 per cent. Demand for helicopters is better insulated, as people opting for a charter chopper service do not generally have a viable option offering similar benefits, unlike competition from commercial aviation in the case of charter business jets.
 
There are about 200 business jets and over 100 helicopters used for civil operation in India.


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Business charter segment loses altitude on fuel price hike