Aviation refueling business: A goldmine of opportunities
A.K. Gandotra, P.B. Mhatre & B.V. Bhadran & R.K. Tyagi
(Oil & Natural Gas Corporation Ltd, Mumbai Region, Air Logistics, Juhu Helibase)

It does not appear to be possible to decrease the fuel consumption of airplanes. ONGC, India’s
largest oil & gas Exploration & Production Company is playing a vital and important role in meeting
the energy requirement of the country particularly in the field of hydrocarbon sector. Recently it has
received approval from the Union Government to get into aviation refueling business. The company
initially plans to produce and sell 20,000 kilolitres of ATF from its Hazira unit in Gujarat and obtained
the permission on 06.06.2006 from Director General of Civil Aviation for production, storage and
delivery of ATF. ONGC’s first aviation fueling station (AFS) is planned and coming up at JuhuHelibase and ATF produced at Hazira Plant shall initially be used for its captive consumption. In
order to assess business potential in ATF refueling business, an attempt has been made to study all
the aspects of present and future aviation technology, the Indian and global scenarios of aviation
industry especially after liberalization of economy, emergence of no frills air lines, categorization of
the Indian aviation sector, etc.

As long as there is a need for people to get to places quickly, there will be a need for aviation. It
does not appear to be possible to decrease the fuel consumption of airplanes as much as that of
cars or of space heating. ONGC, India’s largest oil & gas Exploration & Production Company is
playing a vital and important role in meeting the energy requirement of the country particularly in the
field of hydrocarbon sector. Recently it has received approval from the Union Government to get into
aviation refueling business. The Government nod, which came only in 2005, will permit ONGC to
market aviation turbine fuel1. The company initially plans to produce and sell 20,000 kilolitres of ATF
from its Hazira unit in Gujarat and has obtained the permission of the Director General of Civil
Aviation for production, storage and delivery of ATF on 06.06.2006. The aviation refueling business
is likely to be launched under a new sub brand “Oval Air Fuel”. The company has also got
permission for its plan to set up aviation refueling stations in airports across the country. ONGC is
scheduled to start operations in both these areas in ’06-07and has planned to set up its first AFS at
Juhu – Helibase which would be operational soon.
ONGC’s entry into the fast growing aviation
refueling segment will stir up a business so far
been dominated by oil marketing companies,
Indian Oil Corporation (IOC) with market
share of 65%, Bharat Petroleum Corporation
(BP) with market share of 21%, Hindustan
Petroleum Corporation (HP) with market
share of 14%. The timing of ONGC’s entry in
ATF business is crucial. The domestic
aviation industry is poised for a take off with a
number of new budget airlines taking to the
skies in recent months
Out of total indigenous production of 3.88 MMT in 04-05, the PSU-OMCs produced 2.691 MMT and
consumed in domestic market. Balance production from MRPL was: 0.661 MMT and RIL: 0.528
MMT respectively was apparently surplus and exported.


and a few minor milestones in flight progress. North Carolina on December17. These HC are members of paraffin.294 5.878 5. The Wright brothers made the first sustained.572 4. To avoid the cumbersome process. controlled and powered heavier-than-air flight at Kitty Hawk.507 1. Reliance’s application for pooling existing storage and sale infrastructure among all the refiners according to their producing capacity was opposed by state-run Indian Oil.”.58 1. distances and technology.Table 1 DEMAND SUPPLY SCENARIO Year 2003 -04 2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 Producti on MMT Consumptio n MMT Surplus MMT 3.256 2. Marco Polo brought back stories of human-carrying kites (which stay aloft via the wind's power but are technically tethered to the ground) and flying tops. Jet fuel is mixture of many Hydrocarbons. napthenes or aromatics. This part of the century also saw the steady improvement of flight avionics. Fuel for initial piston engines was gasoline however both engine design and gasoline quality has been improved over the time. retailing jet fuel to airlines would mean putting up tankages and refueling facilities at airports.684 1. Reliance another player in aviation business proposed that it would transport jet fuel from its Jamnagar refinery in Gujarat to the airport through tankers or existing pipeline infrastructure and use state-run oil companies’ facilities at airports for storage and sales.870 2. let’s take a quick review of aviation industry. Jet propulsion developed around 1930. providing the first detailed understanding of the relationship between altitude and the atmosphere.726 2. In order to understand the business potential in ATF retailing business. Aircrafts run with diesel have also been tried. The Technology The last quarter of the 20th century saw a slowing of the pace of advancement seen in the first three quarters of the century. Initial air crafts used piston engines. History of Aviation Men always desired to fly like birds.774 1. 1903 and since then there is no looking back and aviation industry saw tremendous advancements in the years which followed. Besides land being scarce at already cramped airports.652 2. No longer was revolutionary progress made in flight speeds. Man’s desire to fly probably dates to the first time prehistoric man observed birds.332 2. putting up such facilities would involve an array of environmental and safety clearances from a number of authorities. three centuries later when Leonardo da Vince first dreamt of turbines and gained momentum during world wars. Other players are of opinion that” If Reliance wants it can build infrastructure at some distance from airports and use mouser tankers for refueling aircrafts. Upon visiting China in the 13th Century.989 2. an observation illustrated in the legendary story of Daedalus and Icarus2. Hindustan Petroleum and IBP Co.883 2.The first known human flight took place in Paris in1783. Further. Aviation came into existence mainly because of this. "Pao Phu Tau" was a 4th century Chinese book containing some ideas related to rotary wing aircraft (helicopters).165 2. Two types of Jet fuel 2 .344 For new entrants. Ltd. Ballooning became a major "rage" in Europe in the late 18th century.219 3.303 4. Bharat Petroleum.

Some Important characteristics of ATF Jet A-1 are given in Table 2. 90% by volume.Max. Deg C. ii) Wide-cut type (C5 to C15). In October 2003. Kg/m3 Fluidity a) Freezing point. %by volume. Deg C. 3 . This is the longest point-to point flight ever undertaken by an unmanned aircraft.Jet A has freezing point 40οC and Jet A-1 has freezing point -47οC. Max. deg. Max. Several Unmanned Aerial Vehicles or UAVs have been developed. mm. Max c) Olefins content. b) Kinematic viscosity (mm2/s) at . deg. the first totally autonomous flight across the Atlantic by a computer-controlled model aircraft occurred. total mg KOH/g Max. Deg C. % by volume.NO. 4) Residue % by volume. subsonic aviation focused on eliminating the pilot in favour of remotely operated or completely autonomous vehicles.are prevalent: i) Kerosene type (C8 to C16). Min.' d) Sulphur. In April 2001 the unmanned aircraft Global Hawk flew from Edwards AFB in the US to Australia non-stop and unrefuelled. Max. Table 2: Important characteristics of ATF Jet A-1 Fuel (IS No: 1571-2001) S. Even today this fuel is used in Canada because of favorable climatic reasons. Max. Wide cut Jet fuels which span the boiling range of gasoline and kerosene was more prevalent during world war because of consideration of availability. Kerosene type Jet fuels Jet A & Jet A-1 are used in rest of the world. c) Density at 15 Deg C.015 25 5. Naphthalenes. It has very low freezing point.Min b) Smoke point.cent max.3 0. Other variables being constant a refinery can produce a few more percent of Jet A than Jet A-1 from same input. deg. % by mass. i) CHARACTERISTICS Appearance ii) iii) iv) v) Composition a) Acidity.0 Technology . total % by mass.20 C.5 38 775 to 840 -47 8 42.8 25 19 3. % by volume. Min. Jet fuel is mixture of many hydrocarbons. Max. Max. Wide cut Jet fuels are also known as Jet B and are widely used in Canada and Alaska.cent 2) Fuel recovered : 10% by volume. % by volume. Product of API gravity and Aniline point. max. low flash point but higher volatility. ONGC would be producing Jet A-1 from its Hazira unit.cent. Min.5 1. Max. Max. Fuel price and availability drives the use of Jet A in US.0 0. However lower freezing point comes at a cost. Deg C. 50% by volume. Max 5) Loss. REQUIREMENT Clear bright and visually free from solid matter and undissolved water at normal ambient temperature 0.003 Report 205 Report Report 300 1. Out of this Jet A is used in USA while Jet A -1 in rest of the world.post 1991 In the beginning of the 21st century. b) Flash point (Abel). Volatility a) Distillation 1) Initial boiling point. and took 23 hours and 23 minutes. Combustion a) Specific energy MJ/Kg. Main difference is in freezing point -. mercaptan. b) Aromatics. 3) Final boiling point. e) Suplhur.

private carriers were permitted to operate scheduled services and granted scheduled carrier status upon fulfillment of certain applicable criteria. Pursuant to this Act. Germany (Lufthansa) and Japan (Japan Airlines). as the planes were required to fly over the oceans if they wanted to break the sound barrier. has substantially moved away from government control and ownership towards deregulation and private ownership. Indian Airlines was earmarked to primarily serve the domestic sector alongside operations to a few select international destinations while Air India served the international sectors.Jet Airways and Air Sahara. Air Sahara. The liberalisation of the Indian aviation sector commenced in 1990 with private sector players being allowed to operate as air taxi operators. Air Deccan. Modiluft. the United Kingdom (British Airways). only two continue to have operations in the country -. However. The origins of this trend can be traced back to the deregulation of the United States' airline industry in the late 1970s. The Concorde also was fuel hungry and could carry a limited amount of passengers due to its highly streamlined design. it is generally agreed that the 21st century will be a bright one for aviation. NEPC Airlines and East West Airlines. Emergence of 'no-frills' airlines Following the emergence of no-frills airlines in the United States and Europe and the resultant revolution witnessed therein in the aviation sector. The Global & Indian scenes Over most of the last three decades. Damania Airways. both of which were owned and controlled by the Indian government. This transformation also subsumed another trend of privatization of government owned airlines designated by a country's government to operate international air services to and from that country as evidenced in Australia (Qantas Airways). the civil aviation sector world-wide. following the repeal of the Air Corporations Act. The Indian aviation sector was also characterized by a high degree of government control prior to 1990. Supersonic flight was not very commercially viable. Given the feeling that there is vast untapped potential in the Indian aviation segment. Despite this setback. full and discounted fares. commenced operations in August 2003.In commercial aviation. Among the many private airlines which started operations with the deregulation of the Indian civil aviation sector. In 1994. Air India also carries domestic passengers on domestic legs of its international flights. which led to lower fares and higher improved productivity of assets and capital. In addition to Indian Airlines and these six players. the early 21st century saw an end of an era with the retirement of the Concorde. However. and the general slowing of progress. offering both. A number of private players commenced domestic operations as air taxi operators including Jet Airways. many of these operators could not sustain their businesses and closed operations by 1997. Categorization of the Indian aviation sector The Indian aviation sector can be broadly divided into following four main categories: 4 . there is no dearth of players who are contemplating entering the Indian domestic aviation market. India's first nofrills airline. there were only two players left in the Indian aviation sector. As recently as May 2005. The Government of India nationalized the airline industry in 1953 through the enactment of the Air Corporations Act. the concept of no frills airlines started generating interest in Asia and a number of no-frills airlines have emerged in the Asian continent. Kingfisher Air too commenced operations followed by Spice Jet and Go Air thus taking the total number of private carriers providing scheduled services to six. they were not permitted to operate scheduled services.

which include 20 Nos.000 crores which will facilitate operation of bigger aircraft. Air logistics support services are provided to offshore rigs. According to estimates from the aircraft manufacturer. This way ONGC would use its own ATF for operating its Heli-operations. Malaysia.The Airport Authority of India (AAI) is also upgrading 35 non-metro airports at an estimated cost of Rs 8. Thane-Belapur and Taloja industrial areas and the huge catchment area ranging from Pune to South Mumbai are expected to assure a steady growth rate in traffic at the new airport thus assuring steady increase in consumption of ATF. Thailand. The Indian authorities have reportedly said that the domestic and international air traffic will increase by about 20% annually. It thus becomes evident that with the opening up of the Indian aviation sector. platform installations. A part of ATF produced at Hazira would be consumed for refueling helicopters at Juhu-Helibase as well as at offshore platforms. which provide scheduled flights within India and to select international destinations. Indian Airlines. 5 . The investments have been estimated at US $20 billion over the next five years and the increase of aircraft numbers is expected to double the number of civilian passenger aircraft in India to 400. there shall be an additional surge in the revenue of ONGC. Global Vectra: 06. to operate scheduled services to other international destinations. and 4. being supported by 02 Nos. the United Kingdom and the United States of America. it designated four scheduled Indian carriers (Air India. Today. The prevailing market price of twenty thousand kilolitres of ATF works out to be around Rs. attendance to un-manned platforms and to meet any operational emergencies and natural calamities in offshore as well as onshore operations. of charter helicopters (PHHL: 12. ONGC as such operates around 21 helicopters providing logistics support for its onshore and offshore operations. One Dhruv helicopter has been purchased recently from M/S HAL and another two Dhruv helicopters are to arrive at the end of this year. crew change. Further on augmentation of production capacity of ATF. which include charter operators and air taxi operators. 2. UHPL: 02) for the Mumbai Region.1. there are opportunities for taking. according to vice-president for sales at Boeing3. Oil tankers etc for movements of men and materials. falling ticket prices and an increase in passenger traffic will cause an increase in the demand for aircraft. Further a new airport is coming up at Navi Mumbai which is expected to absorb future growth in population. Newer air lines are purchasing aircrafts which ultimately require aviation fuel for operation. MSV’s. we have a mix of owned and charted helicopters. Further helicopters could also play an increasingly large role in intercity air transportation in the near future 4. Summation As seen in the foregoing discussion that the air traffic is going to increase in India and with the opening up of the Indian aviation sector. of helicopters for Vizag in the Eastern coast of ONGC fields. inter-platform movements. 88 crores and with each passing month ATF prices are increasing as oil prices in international market are going up. Jet Airways and Air Sahara) to operate international services to and from Singapore. which includes air transportation of cargo and mail. Flying away The Indian government changed the aviation policy on December29. Hong Kong. there are opportunities for the taking. On January11. 2004 and permitted Indian scheduled carriers with a minimum of five years of continuous operations and with a minimum of 20 aircraft in its fleet. 3. due to investments from the government and private sector. International airlines. which operate scheduled international air services to and from India. 2005. the Jawaharlal Nehru Port Trust. Domestic airlines.The special economic zone. India's civil aviation industry will need to purchase 490 aircraft over the next 20 years. develop expertise in ATF refueling business and also save substantially. business and commercial activity in the region. Air cargo services. Non-scheduled operators.

References: 1.Head. 4. Govt. International Business Strategies. Offshore Logistics. Thanks are also due to colleagues and friends working at JuhuHelibase for fruitful discussions. Columbia University Press. 2005. 3. of India’s Authorization No: P-11013/18/2004-Dist dated 2nd August’2005 Encyclopedia. Yogesh Bhatnagar. Mumbai for his guidance and encouragement. Aviation in India. The Futurist. 6 . More helicopters in our future business. 2. September / October 1991.Acknowledgements Authors are thankful to Sh. GGM . August 2005.