Interview with David Velupillai

Biz@India

January 2016

Corporate Jet Aviation Warming Up in India

David VelupilLai, Managing Director, Airbus Corporate Jets

Growing economies such as India drive growth in aviation and vice versa. However, a good infrastructure is crucial for supporting the corporate jet aviation, says David Velupillai.
 
What is new in the A319?
 
In the new engine option (NEO) we have turned the modern Airbus jets into corporate jets by customising the cabins. It could be something for a company, a billionaire or a government. The NEO gives a big improvement in efficiency of the aircraft that translates directly into range. Our cabin is the best because it is wider and taller than any other business cabin, and now customers can take it even further. In the new generation, we have A319neo and A320neo. The A319neo will fly eight passengers up to 6750 nautical miles (nm) in about 15 hours of flying. This allows you to go nonstop to most parts of the world. The A320neo will fly about 6000 nm (13 flying hours) with around twentyfive passengers. We announced UK as the first customer for A320neo while Alpha Star, a Saudi Arabian company, is our first customer for A319neo.

How do you foresee markets like Asia? How has been their performance in the last few years?

Economic growth (GDP) is the primary driver of growth in aviation. This is true for both the airlines and corporate jets. Today, India is growing the fastest and has crossed ahead of China, which was growing at 7 pc. We already have a presence in India; many private companies fly airbus corporate jets.

Traditionally most of the airlines have been in North America and Europe. Yet in the next 20 years, Asia in general – India, China and the rest of Asia-Pacific – will be the biggest market for aviation.

What is your current market share in India?

We are a little bit discreet with our numbers, as most of the customers don’t want to be named. We have sold about 170 corporate jets worldwide. Asia-Pacific accounts for 25 of them. This includes Australia, Malaysia, Thailand, Hong Kong and China. To us, this is the top end of the market. We are in the business of giving wings to our customers’ lifestyle. So the numbers are small compared to the airlines side. Still, it is a useful complimentary business to Airbus.

Taking a two-decade view, what could be the potential rise for corporate jets in India?

We would like to sell more! India is a big country, with a large population and is growing fast. However, business aviation is a little bit like chicken and egg. It needs the infrastructure – the airports, the business aviation terminals, and the maintenance facilities. If it exists then it attracts corporate jet customers. Vice versa, if the customer demand exists, the infrastructure develops. Today, India like many countries is little constrained by the infrastructure. For example, not having enough landing and takeoff slots. Like in the UK, London Heathrow is already busy, it is almost impossible to get a landing and takeoff slot.

So the growth will depend on the infrastructure. The governments are realising that business aviation can naturally contribute to economic growth. For example, when a big company uses a corporate jet to become more productive, it tends to grow faster and be more profitable. This growth can help to secure business, which then ensures the employment of many people in that company and goes further into the community. There is literally the potential for the corporate jets to help if companies buy the corporate jets for the economic growth of the country.

How do you see the initiatives by the new government to boost air infrastructure?

A319 NEO: Will it take Airbus to new heights?

Whenever a government is friendly towards business, it helps to ensure economic growth. This benefits everybody in the society from top to bottom. We see potential for many companies and billionaires in India to use corporate jets. And although the taxpayers here want the government to spend money on hospitals and roads rather than corporate jets, the same taxpayers will also criticise if a head of state falls asleep at a state banquet or if a minister fails to negotiate the best trade deal. You can’t have it both ways. Governments around the world, especially in big countries, can justify corporate jets. It’s a false economy not to have them.

The Indian government is also looking to acquire some VIP aircraft, are you in the running for that?

We won’t speak about specific campaigns. All I can say is that we have the world’s most modern aircraft family. Besides the best cabin, we have fly-by-wire controls, which is not there with competitors. We extensively use new materials and have centralised maintenance. All these factors help the corporate jet customers to get the best out of their aircraft. Our sales have crossed more than 15,000, mostly airliners, but some of them are also corporate jets. We have more than 500 customers and operators. So, we have a strong product support network around the globe.

But we are a step further for the corporate jet owners because we provide additional services that are dedicated to them specifically. A corporate jet operator perhaps flies just one aircraft with a small team of pilots and mechanics. So they don’t have a big engineering outfit or maintenance organisation behind them. So we have put in place the Airbus Corporate Jet Customer Care Center. It’s single point of contact where a corporate customer can call about technical advice, spare parts or training. We also have dedicated customer support directors. We have a low utilisation-maintenance programme, as corporate jet customers tend to fly fewer hours per year than the airlines. We do a lot to try to help the customer get the best out of their aircraft.

Since many companies might not want a full-time aircraft, do you see time-share corporate jets like Netjets picking up in India?

Netjets is trying to do the fractional ownership model. You can buy part share in an aircraft and they guarantee to provide you transport whenever you want; not necessarily in the same aircraft. It seems to work for Netjets with smaller corporate jets, but not at the top end of the market. However, there are about fifteen companies offering an Airbus corporate jet to VVIP charter. But typically, a private owner will buy the aircraft, and use it when they want for their business, family, and friends. For the rest of the time, they put the aircraft on charter market, which helps to reduce their operating costs. That’s an alternative, if you dont want to buy your own aircraft.