India Inc jets past slowdown

Three private luxury planes costing up to Rs 350 crore each will be delivered to industrialists, biz groups in the next 3 months. Nine more in the next two years

Three private luxury planes costing up to Rs 350 crore each will be delivered to industrialists, biz groups in the next 3 months. Nine more in the next two years

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Owner's pride: The Falcon 900 DX

Where is recession, at least where India Inc is concerned?

In the next three months, three super-luxury private jets each priced at up to Rs 350 crore will be delivered to three Indian industrialists and business houses. In the next two years, nine more are in the delivery line, even beating sales of these jets in the US, the traditional power buyer.

Six of these buyers are Anil Ambani and the GVK group from Mumbai, Naveen Jindal and Ran Air from Delhi, Cyrus Poonawala from Pune and the GMR group from Hyderabad.

The big boys' toys: the French-made Falcon aircraft, variants of which are owned by British billionaire Sir Richard Branson and Australian industry mogul Terry Peabody, have unlimited potential for luxury. From a hi-tech office, a customised entertainment centre, a dressing room, a private bathroom with shower panels to a kitchen for gourmet meals, the plush flying machine can accommodate every moneyed dream. "Clients can customise the interiors as per their wish and budget," said the company website.

On the buyers' list

Head of Reliance-ADA Group Anil Ambani is buying the Falcon 7X aircraft

Jindal Steel's Naveen Jindal is buying the Falcon 7X aircraft

Head of the Poonawala group Cyrus Poonawala has booked the Falcon 900 EX jet. It's to be delivered within the next three months

"Today we are less dependant on the US market, which historically represented two-thirds of our business. We've already sold a thirty large-cabin aircraft in India and are about to deliver three more in the coming weeks," said John Rosanvallon, the president and CEO of Dassault Falcon, the manufacturer of the jet, in an email interview to MiD Day.

There are 12 high-end Falcon variants being flown around by Indian companies and their price starts at Rs 125 crore.

"The slowdown hasn't affected our sales in India. There have been no cancellations of orders either," said a senior Dassault Falcon official, wishing anonymity.

According to the Falcon official, Anil Ambani and Naveen Jindal have both placed orders to buy the Falcon 7X aircraft. Ran Air has booked the 2000 LX and 900 EX aircraft; GMR wants the 2000 LX, GVK the 2000 DX and Poonawala the 900 EX jet.

"The jets booked by GMR, GVK and Poonawala will be delivered in the next three months," said the official.
While Poonawala and Jindal didn't respond to queries when contacted for confirmation of the deals, a Ran Air official said the company has been since long contemplating to buy the business jets. "We placed the order before the economic slowdown. And there are no plans to cancel the order," the Ran Air official said.

A GVK spokesperson from Secunderabad in Andhra Pradesh said, "The order for the Falcon aircraft was placed long ago and all options were considered by the management." Senior officials at GVK Power and Infrastructure said that the payment for the aircraft had been made many months ago and it was scheduled to be delivered from Paris in the first week of March, 2009. Several calls to Anil Ambani's office for a comment were not returned.

Once booked, cancelling an order is a losing proposition for the buyer. So many prefer to go through with the deal. "To book any Falcon aircraft, five per cent of the total price needs to be paid in advance and then for every stage a specific amount is paid. If the client cancels the purchase, he is not refunded the amount he has already paid because we have to re-customise the jet according to the specifications of the new client, which involves a lot of cost," said the official.

Dassault Falcon plans to sell 100 aircraft in India. The company's sales pitch is especially remarkable considering Indian banks have stopped financing the purchase of private jets after the economic downturn. "Previously, banks like ICICI in collaboration with other financial institutions used to finance the purchase of private aircraft.

Now only Axim Bank and the French government agency Coface is in the field. Yes Bank, RBS and GE Capital too have pulled out of jet financing," said the Falcon official.

Meanwhile, apart from the huge investment needed to acquire one of these beauties, their upkeep too is equally expensive. Around a hundred employees, including pilots, crew members, ground staff and engineers, are needed to fly the jet. "The operation cost of a business jet is around Rs 10 lakh per month," said the official.

HIGH-FLIERS
Vijay Mallya Liquor baron Vijay Mallya Owns Airbus Corporate Jet, B727 Jet Chairman of Sterling Group C Sivasankaran Owns Boeing Business Jet Mittal Steel tycoon Lakshmi Mittal Owns Bombardier Global Express, Gulfstream GV M Ambani Chairman and Managing Director of Reliance Industries Mukesh Ambani: Owns Bombardier Global Express, Gulf Stream IV, Falcon 900 EX Easy Anil Ambani Chairperson of Reliance-ADA Group Anil Ambani Owns Falcon 2000, Bombardier Global Express KP Singh DLF Chairman KP Singh Owns Gulfstream GIV CMD of Raymond Ltd Gautam Singhania Owns Challenger 604 Ratan Tata Chairman of Tata Group Ratan Tata Owns a Falcon 2000 Sahara Group Chairman Subroto Roy: Owns Boeing business jet CMD of Suzlon Energy Tulsi Tanti Citation XL Poonawala Industrialist Cyrus Poonawala: Bombardier Lear Jet
Name of the industrialist or group	Type of plane	Price	Features	Date of delivery
Ran Air and GMR	Falcon 2000 LX	$30 million	Can seat six, has a full service galley and a dressing room	March, 2010 Within next three months
Ran Air and Dr Cyrus Poonawala	Falcon 900 EX	$40 million	Can seat 8, has 24 panoramic windows and a galley for a fine dining experience	March, 2010 Within next three months
Anil Ambani andu00a0Naveen Jindal	Falcon 900 EX	$50 million	Can seat 8, has quieting acoustics and advanced cabin temperature monitoring	Two years
GVK group	2000 DX	$25 million	Can seat 6, has full range of multimedia capabilities, galley and dressing room	Within next three months

Before slowdown

While Poonawala and Jindal didn't respond to queries when contacted for confirmation of the deals, a Ran Air official said the company has been since long contemplating to buy the business jets. "We placed the order before the economic slowdown. And there are no plans to cancel the order," the Ran Air official said. u00a0 A GVK spokesperson from Secunderabad in Andhra Pradesh said, "The order for the Falcon aircraft was placed long ago and all options were considered by the management." Senior officials at GVK Power and Infrastructure said that the payment for the aircraft had been made many months ago and it was scheduled to be delivered from Paris in the first week of March. Several calls to Anil Ambani's office for a comment were not returned. u00a0 Once booked, cancelling an order is a losing proposition for the buyer. So many prefer to go through with the deal. "To book any Falcon aircraft, five per cent of the total price needs to be paid in advance and then for every stage a specific amount is paid. If the client cancels the purchase, he is not refunded the amount he has already paid because we have to re-customise the jet according to the specifications of the new client, which involves a lot of cost," said the official.

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Banks won't help

Dassault Falcon plans to sell 100 aircraft in India. The company's sales pitch is especially remarkable considering Indian banks have stopped financing the purchase of private jets after the economic downturn. "Previously, banks like ICICI in collaboration with other financial institutions used to finance the purchase of private aircraft. Now only Axim Bank and the French government agency Coface is in the field. Yes Bank, RBS and GE Capital too have pulled out of jet financing," said the Falcon official. Meanwhile, apart from the huge investment needed to acquire one of these beauties, their upkeep too is equally expensive. Around a hundred employees, including pilots, crewmembers, ground staff and engineers, are needed to fly the jet. "The operation cost of a business jet is around Rs 10 lakh per month," said the official.