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India's First True FBO Opens in Delhi

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India’s first FBO—located at Delhi International Airport (DIAL)—has finally opened, the facility confirmed this week. Contracted in 2016 to two companies—Bird ExecuJet Airport Services (Dubai) and Indamer MJets (Thailand) Airport Services—the 550-sq-m (6,000-sq-ft) terminal was much smaller than originally planned. In fact, it was initially considered to be a temporary facility until a larger building could be built. The terminal and two hangars cost about $7 million.

Given the sparse requirements, the vacant 6,500-sq-m plot next to the terminal has been left for possible future expansion, Indamer MJets managing director Rajeev Gupta told AIN. “The present facility has a capacity to handle 100 flights a day,” he said.

Due to the pandemic, business remains slow at 60 percent of the level that Bird ExecuJet did last year, said CEO Anurag Srivastava. Bird, a member of the Paragon FBO network, currently handles 20 to 25 domestic movements a day and Indamer around 10, while international flights have become almost nonexistent in the Covid era. Customs and immigration officials are on call when and if international business aviation flights arrive.

The FBO has a common lounge that can accommodate up to 50 people, a crew lounge, shower facilities, and amenities such as a food and beverage counter. There is also a small retail area with duty-free shopping. The 2,600-sq-m parking area can accommodate 50 vehicles. Fifty-five aircraft can be parked on the 65,000-sq-m apron. Bird will likely expand its MRO facility there, Srivastava told AIN.

One of the biggest hurdles for the FBO operators is the high revenue sharing clause between the concessionaires and DIAL. “Rationalizing charges in a transparent way is our approach,” said R.K Bali, managing director of the Business Aircraft Operators Association (BAOA). While nobody was willing to be quoted, an airport official told AIN that a 23.1 percent royalty on invoice value is assessed by DIAL, leaving close to nothing as return on investment.

Gupta is concerned about too much competition at the airport, and said, “Looking at what we have spent on building the terminal and hangars, rentals on land, cost of equipment, staff, no business during months of lockdown, topped with a new airport coming up in Delhi in five years with an FBO likely to take away 50 percent of business by the time our concession ends in 2034, we envisage we will have a no-profit, no-loss return on investment. DIAL should have had only one FBO, not two concessionaires.”