The Hindu Business Line : Centre for Asia-Pacific Aviation to set up $250-m venture fund

Aviation consultancy firm CAPA (Centre for Asia-Pacific Aviation) is setting up a venture fund worth $250 million for investments into general aviation sector and is raising an equal amount for some of its clients who are planning to set up a regional airport and an aviation school.

Aero park

CAPA will also set up a 70-acre aero park either in Navi Mumbai or in Bangalore, which will entail an investment of around $100 million. “The timing is right because we believe that long-term story about the Indian aviation sector is very robust,” CAPA’s chief executive officer for Indian sub-continent and the Middle East, Mr Kapil Kaul, told Business Line. CAPA will, however, not invest in existing domestic airlines. “The mandate of the fund is not to look at existing airlines,” he said.

CAPA has already put in place a management team for the aero park, which will be headed by Mr Andrew Drydale, who was the chief executive officer for IATA (International Air Transport Association) Asia Pacific till recently. The aero park will consist of an aviation management school, training schools for air traffic controllers, pilots and the cabin crew. The aero park is expected to become operational by the first quarter of 2010. The aero park will also have an aviation environment research centre in its campus.

Mr Kaul said that CAPA’s Indian operations is raising capital worth about $250 million for some of its clients for about four projects including setting up of a regional airport in eastern India. He said his firm is in talks with 8-10 HNIs (high net worth individuals) to raise the funds and hence will not be looking for institutional funds. “We could come in with some proprietary capital but we will not seek institutional funds,” he said.

During the first phase, the $250-million venture fund will invest in airports and logistics, MRO facilities and even non-scheduled airlines. To a query whether the fund would look at Capt G.R. Gopinath’s air cargo venture, Mr Kaul said the fund will be operational by 2009-10 and hence would scout for all new opportunities. He said greenfield airports with enough land bank would be another area the fund would look at. The fund also plans to invest in aircraft assets which include regional jets up to 80 seats and new regional airlines backed by strong managements.

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