Viewpoint—The Specialist Lessor, Bharat Bhisé

India may have a population of 1.08 billion, but clearly not everyone can afford to fly. About 400 million people live on less than a dollar a day and clearly will not be able to afford to fly. In fact, about another 400 million to 500 million people are unlikely to travel by air for the next 10 years. That leaves about 100 million–which is a great market.

However, 80% to 85% of this market is business travel between the metro cities such as Mumbai, Delhi, Calcutta, Chennai, Bangalore, Ahmedabad and Hyderabad. Based on the routes planned by the new entrants, there is lots of competition for this market.

Most of the start-ups are going for the low-cost model. But while the low-cost model has worked brilliantly in other markets, there is no guarantee that it will work so well in India. It is, after all, a country where the middle class is used to getting quality service—most aircraft passengers have domestic workers, for example.

My big worry is that people will focus on market share rather than profitability. A lot of the capacity is being driven by people competing in the same market.

Having said that, I think there are great opportunities. There is no doubt that total market size will double in the next five years—and this is why Bravia has made a strategic commitment to India. The real explosion will come when the leisure traveller and the regional traveller switch from rail and bus transportation. Although everyone is focusing on narrowbodies, there is also room for widebodies and regional turboprop aircraft.

At the end of the day, India is going to be a great aviation market with lots of opportunities in aircraft, MROs, rotable repair shops, etc. We just need to be careful not to over hype it.

Bharat Bhisé is CEO of Bravia Capital Partners, a finance lease company specializing in India, China and Eastern Europe. He has also worked at Freighter Conversion Partners and C-S Aviation Services.