India’s Invision Defers Phenoms as Business Plan Changes

 - June 4, 2014, 3:55 AM

India’s Invision Air has abandoned plans to build a wholly owned fleet of Embraer Phenoms, switching its business model to one based largely on aircraft management and a plan to provide flights connecting smaller cities within the state of Maharashta.

The Mumbai-based group has shelved plans to buy six Phenom 300s and six of the smaller Phenom 100s. After a deal signed in 2007, it had held options for a total of 18 Phenoms, but Invision managing director Vinit Pathak told AIN that these are now “deferred and in abeyance,” adding that Embraer understands the economic pressures that have forced the change of plan and has been “very flexible.”

Invision is evaluating aircraft for the new services it intends to operate within the state of Maharashtra in the west of India. It wants to use two or three 19-seat twin turboprops and expects to choose the aircraft type in November.

Maharashtra is one of several Indian states offering subsidies to operators willing to provide service between towns that are not well served by scheduled airline flights. But Invision does not want its route choices to be constrained by the terms of any subsidies. “We are doing our own analysis on city pairs we will link in Maharashtra,” explained Pathak. “Our non-scheduled [charter] flights will be market driven.”

India’s aviation regulations do not permit non-scheduled [charter] carriers to publish flight schedules, although effectively these operators can sell individual seats on the aircraft and contrive for passengers to depart at the same time. Invision will also offer the aircraft for whole-airplane ad hoc charter.

Invision is looking to base these operations at Nashik, which is about a 25-minute flight from Mumbai. The city’s airport is owned by government-controlled aerospace and defense group Hindustan Aeronautics. Invision already has a maintenance operation there and is now in talks with HAL with a view to expanding the facility as a base for charter operations.

At the same time, Invision is shifting its business model to one based on aircraft management. It has forged an informal alliance with 14 operators controlling 17 business aircraft that will also be available for charter by third parties under the auspices of Invision. The aircraft range in cabin size from four to 17 passengers. The company will continue to operate the two Phenoms it has already received from Embraer.

Invision will offer customers a jet card membership option for using these managed aircraft. They will be able to pre-purchases blocks of 25, 50 or 100 flight hours that are valid for 12 months.

According to Pathak, aggressive pricing that has seen flight-hour rates offered at below cost is making the executive and private charter business in India unsustainable. The country’s Business Aviation Operators Association has complained that excessive bureaucracy, inadequate regulations and an unfavorable tax environment are combining to stifle the industry’s growth.

“[The charter business in India] is not about pure commercial competition,” said Pathak. “Owners who have airplanes sitting are willing to charter them out at any cost and brokers push the price [down]. This is one reason why nobody wants to get into the charter business here.”

However, he believes the situation is improving as clients become more aware of the added value business aviation can bring. “We encourage clients first to use the 25-hour card. Once they graduate to 300 hours, we advise them on the airplane they should buy,” he said. Invision expected to announce its first direct aircraft management deal last month, likely involving an eight-passenger jet.

“The only way to survive in this business is innovation and change,” concluded Pathak. “What was a good plan in 2007 is no longer good. We will remain in the business because of its potential and hope demand will happen in time.”