According to a recent report by Ascend Advisory, an aviation consultancy firm headquartered in the UK, sales of aircraft across the globe have been hit by the economic downturn. In 2012, business jets saw a ‘low year’ with just 675 deliveries, virtually flat compared to 2011 and only half the number of deliveries five years ago. Also, while North America and Europe remain the two key markets for business jets, their share of deliveries has fallen from almost 90 per cent 10 years ago to just 70 per cent in 2012. The forecast is that growth will come from emerging markets like Latin America and Asia-Pacific, which accounted for 30 per cent of the deliveries last year.
India, according to KPMG, has more than 165 business jets, up from 23 in 2005. Amber Dubey, partner and head , aerospace and defence, KPMG India, says the country has the Asia-Pacific region’s second-largest business jet fleet after China. In India, business jets have grown at a CAGR of 32.5 per cent between 2005 and 2012. Between 2011 and 2012, however, the growth has been barely 7 per cent. “In 2013,” adds Dubey, “the industry expects to add another five to seven business jets”.
He, however, agrees that the downturn has hit the sector adversely, with the demand for business jets expected to remain sluggish in the next 12-18 months due to the “huge rupee depreciation, corporate austerity measures, rising airport charges, high fuel prices, taxes and complex procedures”, besides what Dubey calls “the lack of a suitable government policy framework”. The business could crashland, prompting some companies to cancel orders and, in a worst case scenario, even sell their business.
Read News In Full 22/09/13 Abhilasha Ojha/Businessworld
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