Non-scheduled air carriers fly high despite slowdown in sector

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New Delhi, Oct 9: Despite 2008 being the year of turmoil for the aviation industry due to skyrocketing operating costs, the business and private air carrier sector is growing at a breathtaking speed.

According to data from the Directorate General of Civil Aviation (DGCA), the number of companies that have been approved for non-scheduled operators permits (NSOP) by the ministry of civil aviation this year has jumped to more than 30. This approval essentially clears the deck for the companies to start non-scheduled operations. It is yet unclear that how many of these companies can operate as charters and how many have only got approval for private aircraft.

NSOP is given to all companies operating charters or private and business aircraft operations. NSOP holders cannot publish timetables or fares and essentially operate on an ad hoc basis. They usually operate flights on routes less traveled by scheduled carriers like Air India and Jet Airways.

According to the DGCA data, only 11 NSOPs were issued last year. The country’s scheduled carriers are expected to post combined losses in the range of $2 billion in this fiscal which is expected to double in the next fiscal due to rising operating costs and falling passenger numbers.

According to analyst, mining companies and real estate firms in the interiors of the country are the main drivers of this phenomenal rise in the number of applications for NSOPs. “Their requirements are more pragmatic in nature,” he said.

“Also due to the huge amount of wealth being created in the country and the rising number of high net worth individuals, a number of entrepreneurs see a huge opportunity in private air travel and are starting charter companies,” the analyst added.

According to the annual World Wealth Report released by investment banking major Merrill Lynch and consultancy major Capgemini, India saw its millionaire population surging in 2007 by 22.6%—higher than any other country in the world.

Last year’s report showed that India had the second fastest growth rate of 20.5% after Singapore’s 21.2%. The number of high-net worth individuals (HNWIs) in India grew to about 1,23,000 at the end of 2007, up from 100,015 last year.

Currently, the charter aviation market in the country is highly fragmented, with around 30 air charter operators operating a couple of aircraft.