BAOA and P&W Lay Out Social Impact of General Aviation for India

With a focus on revamping the potential of General Aviation (GA) and Business Aviation’s (BA) growth in India, Business Aircraft Operators Association (BAOA) prepared a forward-looking document, with case studies and assessments based on global experience in collaboration with Pratt & Whitney. The whitepaper examines the financial and operational models of aviation missions around the world that focus on the common public good.

The report was released during the 5th edition of the BizAvIndia Conference held on March 11, 2020, in Hyderabad. The release of this special concept report, titled ‘Social impact of General Aviation’, was indeed a significant occurrence. There were simultaneous ‘press releases’ at Montreal and Hyderabad to mark the occasion.

“Pratt & Whitney turboprop, turboshaft and turbofan engines have powered the growth of business and general aviation for decades,” said Ashmita Sethi, Managing Director of Pratt & Whitney India. “BAOA is the voice of business and general aviation in India and we’re delighted to have collaborated with them on this project. The study demonstrates just how vital these kinds of missions are to societies around the world.”

Touching upon various sectors under this topic, the report highlights how the number of operators as well as the fleet of Non-Scheduled Operators (NSOP) has gone down instead of witnessing growth. The budgeting issues were also put forth as the major reasons by the BAOA President. It also underlines how the cost on the accounts of lack of trained pilots, fuel cost, and maintenance and handling charges by the airports has increased the loss of apparition. This report primarily draws attention to three areas that are important for the industry in India: remote air connectivity, emergency medical services (EMS), and disaster management.

The team of experts from Pratt & Whitney examined changes effected by nations with similar conditions to optimise GA/BA potential in these areas. Based on the examples of these countries, the financial models that could be adapted in India have been showcased in the report. BAOA further aims to make use of this document to work on the ministry’s vision to make GA/BA an integral part of India’s aviation ecosystem – one driven by EMS, disaster management, regional connectivity, and tourism.

“With the ‘elitist’ tag for GA/BA now gone, our focus can turn to adequate infrastructure, proportionate (but completely safe) regulations for smaller aircraft, and the current tax differential. We shall aim to grow GA/BA in India seven-fold, with an additional 200 amphibious aircraft to serve India’s coastlines and water bodies,” BAOA stated in the report.

For a long time, the aviation industry has been largely dominated by government activities as those of national defence and commercial pursuits like passenger travel, the report states. It further adds that there is also a third and rapidly growing area of “social missions” with societal benefits like patient transport, disaster response and recovery, and more. Many emerging countries are looking for ways to develop better models and methods to lift up their citizens, from connecting remote communities to the broader economy, to ensuring fast and reliable access to medical attention, to helping citizens through natural disasters. Acknowledging this, the report looks at the many ways that nations around the world are building success in these important areas.

“In India and around the world, social missions like these are helping millions of people. The study demonstrates how important it is to set up the best possible policies and financing models to empower our fellow citizens – and boost our economy,” said R.K. Bali, managing director of the BAOA.

EMERGENCY MEDICAL SERVICES (EMS)

Traditionally, military deployments have carried out aeromedical emergency services. However, with an increasing requirement for quick and practical transport for patients, the last few decades have seen EMS services move into the civilian space as well. In the United States, for example, 5,50,000 patients use air ambulance services each year, the reported noted. EMS has the capability for both a primary response (emergency en route treatment through paramedics/flying doctors and patient transfers from the scene), a secondary response (non-response, non-emergency situations like travel for a planned treatment or patient transfers from rural to urban) as well as specialty medical retrieval for special cases like neonatal/pediatric emergency.

Some of the key growth enablers for EMS include:

• Aging Demographics. The population of 60+ years people is expected to double globally by 2050.
• Favorable Policies. Supportive reimbursement policies and community awareness.
• Government and CSR Initiatives. Rise in expenditure and commitment to CSR initiatives from multiple organisations are pushing growth in community-based services.
• Regional Dynamics. A concentration of aircraft in mature markets has been driven by structured reimbursement policies, advanced infrastructure, favorable government initiatives and the presence of a large operator network.
• Fleet. There has been an increase in fleet penetration as well.
  • Helicopter: Higher penetration in the EMS segment is mainly due to landing flexibility and the ability to transport patients within the “golden hour,” thereby helping reduce the mortality rate.
  • Fixed Wing: Fixed-wing operations gained a higher demand for long-distance patient travel (e.g. between airports, primarily for inter-hospital transfers).
  Some of the suggested operating-business models are:
• A “traditional model/approach” through hospital affiliation (department of a hospital or group of hospitals) operated either for-profit or not-for-profit: the group has complete control over business decisions with the provision of staff and medical services.
• A government-run/funded approach operated via civil or government organisation. These contracts might include other services such as search and rescue (SAR) or disaster assessment.
• Independent model, also known as the community-based model. Under this model, operations are tied with a medical institution, and providers may fall under the category of for-profit or nonprofit.
  Following are some key observations presented for EMS in the report in the context of India:
• Although EMS is an immediate need in India, prior attempts made by few players failed majorly due to the unavailability of a robust insurance policy that covers air transport and no clarity on subsidies or reimbursements from the state and central government. However, the government has recently been taking specific steps towards building a sustainable ecosystem for EMS operations.
• Efforts have been seen to coincide air ambulance service into the Ayushman Bharat insurance scheme through the “Rasta Apatti Kawach” policy.
• Conscious efforts are also being made by the nation toward partial airspace deregulation and, in 2016, proposed a policy that would allow helicopters to fly point-to-point without prior air traffic control (ATC) clearance in airspace below 5,000 feet.

REMOTE AIR CONNECTIVITY

The report points out that the lack of connectivity often limits the socio-economic development of highly remote areas is in most cases. Despite variations in geographical positioning (e.g. island, difficult terrain, climatic barrier, and dense forest) and population density, these regions face similar challenges.

Remote air connectivity ecosystem can help to reduce travel time, increase access to basic amenities (e.g. education and healthcare), promote job creation, address the social and economic concerns, and enhance financial stability. To do so, the report highlights the below remote air connectivity ecosystem pillars:

• Financial Assistance. A better air connectivity financial model should be put into place through grants and subsidies. The report mentioned how some countries fund selective programmes to support the growth of sectors like tourism and cargo through their NGOs and association. Direct subsidies are also provided in the form of tax relief, guaranteed fixed payments for specific routes, fuel subsidies, and per-seat payouts. Indirect support is mainly offered to communities. According to the report, local governments play a vital role in providing subsidies to the operators with minimal or no intervention from the central government since local governments are in a better position to determine and evaluate pioneer routes without any approval from the central government.
• Regulatory Framework. Some governments have mandated airlines to accommodate fixed flying hours to remote regions. Certain government/aviation authorities have set the airfare for remote routes. A subsidy aimed at supporting operators for better fleet management and reduce operational costs have been worked out.
• Infrastructure. There needs to be a focus on the development of airport infrastructure and creation of a sufficient pool of skilled labor to support effective utilisation. Regional hubs should be developed alongside increasing passenger turnover for mainline flights by linking remote routes with regional/subregional hubs.

REMOTE AIR CONNECTIVITY ECOSYSTEM (RACE) IN INDIA

Similar to the global initiatives, the Indian government has drafted a plan to offer various aids through the regional connectivity scheme (RCS), also known as UDAN. Subsidy or viability gap funding (VGF) is provided in return of seats offered by fixed-wing and helicopter operators at cheaper rates. Airfares are capped. Apart from the airports’ development plan, the government announced the addition of 275 parking bays to ease congestion at airports in 2018. In spite of all of these initiatives, the success rate of the first two phases of RCS routes has been less than 20 per cent. This is mainly due to the operational, technical, procedural, and financial problems in the scheme. The small operator group still feels the pressure of hiring talent from abroad, importing spare parts and parking and handling charges at airports, coupled with stringent safety regulations.

DISASTER MANAGEMENT

The report significantly underlines that as much as natural disasters are inevitable, it is essential to face them efficiently and limit the damages when they do occur. According to a UN (United Nations) report, over a decade, 7,00,000 lives have been lost and 1.4 million people have been injured which resulted in $1.3 trillion economic loss. Since these disasters initially impact the ground infrastructure, air transport becomes the only connection to these regions for providing support in the form of food and medicine, search and rescue, and firefighting.

THE REPORT WAS RELEASED DURING THE 5TH EDITION OF THE BIZAVINDIA CONFERENCE HELD ON MARCH 11, 2020, IN HYDERABAD. THE RELEASE OF THIS SPECIAL CONCEPT REPORT, TITLED ‘SOCIAL IMPACT OF GENERAL AVIATION’, WAS INDEED A SIGNIFICANT OCCURRENCE.

FIREFIGHTING

Helicopters are gaining prominence due to their versatility and performance (superior mobility, speed, and hovering capability compared to fixed-wing aircraft) and the ability to cater to a wide range of applications (aerial reconnaissance, equipment, and asset delivery and medevac missions). Since wildfires can be rampant and spread quickly, maximum aircraft deployment in quick times is essential. Contracts are typically structured to cater and act as “exclusive use contracts” and “call when needed” contracts.

SEARCH AND RESCUE (SAR)

Traditionally, countries have been entirely dependent on their respective coast guard/military for SAR operations. Governments across the globe are now working to enroll the services of private operators through contracts so that the swift response to any disaster situation can be delayed due to other obligations as deploying the resources needed for SAR operations is dependent on the availability of an aircraft.

HUMANITARIAN AIR SERVICES

Whenever a country encounters disaster like situation, it might not have enough resources to handle it alone. To assist all the countries in such circumstances, multiple international organisations like the United Nations Humanitarian Air Services (UNHAS), the World Food Programme (WFP) and the ECHO Air Service by the European Union has been established that carry out humanitarian air services.

Some key observations that the report lists under disaster management in the view of India include:

• Traditionally, India has been reliant on the military to step in for disaster relief activities.
• India created a National Disaster Management Plan (NDMP 80) in 2016 to make the country become more disaster resilient and achieve substantial disaster risk reduction. The plan ensures that all phases of disaster management — preparedness, mitigation, response, and recovery — are covered by horizontal and vertical integration among all agencies and departments of the government.
• The NDMA seeks to improve the plan periodically by keeping up with the knowledge base and global practices in disaster management.
• The plan is yet to see full-scale deployment and still in the process of identifying requirements of resources such as helicopters, aircraft for evacuation during natural disasters.

Hence, the report has efficiently stated that EMS is growing around the world – and particularly in the Asia-Pacific region – due to aging populations increased healthcare spending and favorable policies and hence need a further push. Remote Air Connectivity supported by a comprehensive set of policies can help lift up the social and economic status of remote regions; and the growing importance of Disaster Management along with humanitarian aid programmes must be tapped into.