The largest-selling business jet in the world is sold by him. Still, Nigel Harwood-led InterGlobe General Aviation has had a modest two years in the past. B&E takes a running interview of Nigel to get the dope on flying by Steven Philip Warner
Even competitive pressures are rising for Harwood, with many international players like Boeing, Cessna, Falcon having eyed the Indian business jet market for long now. Harwood is hopeful, “Hawker Beechcraft, which currently holds a global market share of 60% has had a very long and successful history in India. Furthermore, with our latest additions to the product line (Sikorsky Aircraft Corporation, Dornier Seaplane Company and Pacific Aerospace) we see huge potential for growth.”
Despite his well-practised optimism, there are some challenges that he cannot ignore though, such as an import duty on your aircraft which currently stands at 17%. The lack of infrastructure is another worry at present but with the ongoing modernisation projects (apart from 35 airports in smaller locations) and other greenfield projects, this challenge may be sorted out in time. There is a third problem that has plagued the commercial and business aviation players for a long time and that is financing. While players in the commercial circuit have accumulated Rs.340 billion in losses over the past five years, thereby forcing the creditors to shy for the near future, in the recent two years, the lack of financing has hit buyers’ hopes in the business aviation space. A Sydney-based aviation analyst outlines two other challenges to B&E: “Skills shortages and lack of flexibility for private travel in terms of need for advanced regulatory clearances.”
Irrespective of however positive Harwood apparently is, the fact is that downturn has been a dry run. Business aviation is all about internal funding, which came only in trickles during the slowdown. Imagine this – out of the 88 non-scheduled operator certificate holders, as on November 30 2008, only 30 were operational. The past couple of years have not been the easiest for InterGlobe General Aviation either. Harwood accepts, “It hasn’t been an easy ride for us during the slowdown as purchase decisions got deferred, but we kept working on the relationships, knowing a time would come when they would buy again. IGGA investors have been keen to see better results.”
“That was a time when I had to make important decisions. When I called up my MD (Rahul Bhatia, MD of InterGlobe Enterprises) and asked for his advice, he told me that as CEO, it was my call to make. He just hoped that I would make more right decisions than wrong,” recalls Harwood. At the same time, there are positive signs too – for example, in April 2010, the company managed to sell seven aircraft – a start to earn it a “billion dollar corporation” tag this financial year.
Diversification is one strategy that IGGA will attempt over the next few months, though the company plans to stay unlisted – a good bet, considering how publicly-listed entities in commercial aviation have given their shareholders bedsores. John of Frost & Sulllivan has another advice: “The Air Taxi model in business aviation is a proven success in North America & Europe. InterGlobe could look at them (within India) as an investment option, due to the low initial investment and minimal operating cost,” says Harwood.
Back in Preston, Harwood’s grandfather was a farmer, who had a passion for making wooden furniture & shoes. “What I learnt from him as a child was ‘attention to detail’, which is much needed in the business I am in,” says Harwood. One guesses he’ll require much more than that to succeed – a fair amount of luck...
For more articles, Click on IIPM Article.Even competitive pressures are rising for Harwood, with many international players like Boeing, Cessna, Falcon having eyed the Indian business jet market for long now. Harwood is hopeful, “Hawker Beechcraft, which currently holds a global market share of 60% has had a very long and successful history in India. Furthermore, with our latest additions to the product line (Sikorsky Aircraft Corporation, Dornier Seaplane Company and Pacific Aerospace) we see huge potential for growth.”
Despite his well-practised optimism, there are some challenges that he cannot ignore though, such as an import duty on your aircraft which currently stands at 17%. The lack of infrastructure is another worry at present but with the ongoing modernisation projects (apart from 35 airports in smaller locations) and other greenfield projects, this challenge may be sorted out in time. There is a third problem that has plagued the commercial and business aviation players for a long time and that is financing. While players in the commercial circuit have accumulated Rs.340 billion in losses over the past five years, thereby forcing the creditors to shy for the near future, in the recent two years, the lack of financing has hit buyers’ hopes in the business aviation space. A Sydney-based aviation analyst outlines two other challenges to B&E: “Skills shortages and lack of flexibility for private travel in terms of need for advanced regulatory clearances.”
Irrespective of however positive Harwood apparently is, the fact is that downturn has been a dry run. Business aviation is all about internal funding, which came only in trickles during the slowdown. Imagine this – out of the 88 non-scheduled operator certificate holders, as on November 30 2008, only 30 were operational. The past couple of years have not been the easiest for InterGlobe General Aviation either. Harwood accepts, “It hasn’t been an easy ride for us during the slowdown as purchase decisions got deferred, but we kept working on the relationships, knowing a time would come when they would buy again. IGGA investors have been keen to see better results.”
“That was a time when I had to make important decisions. When I called up my MD (Rahul Bhatia, MD of InterGlobe Enterprises) and asked for his advice, he told me that as CEO, it was my call to make. He just hoped that I would make more right decisions than wrong,” recalls Harwood. At the same time, there are positive signs too – for example, in April 2010, the company managed to sell seven aircraft – a start to earn it a “billion dollar corporation” tag this financial year.
Diversification is one strategy that IGGA will attempt over the next few months, though the company plans to stay unlisted – a good bet, considering how publicly-listed entities in commercial aviation have given their shareholders bedsores. John of Frost & Sulllivan has another advice: “The Air Taxi model in business aviation is a proven success in North America & Europe. InterGlobe could look at them (within India) as an investment option, due to the low initial investment and minimal operating cost,” says Harwood.
Back in Preston, Harwood’s grandfather was a farmer, who had a passion for making wooden furniture & shoes. “What I learnt from him as a child was ‘attention to detail’, which is much needed in the business I am in,” says Harwood. One guesses he’ll require much more than that to succeed – a fair amount of luck...
Steven Philip Warner
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
“We will change your outlook” - The Sunday Indian on B-SCHOOL RANKING SCAMSTERS EXPOSED! A must read...
The Sunday Indian:-
B-SCHOOL RANKING SCAMSTERS EXPOSED!
For Exclusive Footage by Sunday Indian Click Here
Outlook Magazine's B School Ranking Scam Exposed
Business Standard Exposes the Outlook Magazine Money Editor
Don't trust the Indian Media!
IIPM enters into media education
IIPM makes record 10,000 placements in five years
TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here
Pioneer Exposes the fraud called Mahesh Sharma and Mahesh Peri of Career 360 and Barbel Schwertfeger of mba-channel.com
IIPM: An intriguing story of growth and envy
Prof Arindam Chaudhuri of IIPM on MF HUSAIN
