By Jarrett Banks
Traffic from Mumbai to Pune is a notorious slog of about five hours. Yet it is necessary for business, much like Los Angeles to San Francisco. Blade India is bringing a bit of Silicon Valley magic by allowing customers to book individual seats on its helicopters like an Uber ride share.
In an interview with IPO Edge, Managing Director Amit Dutta said Blade India is uniquely positioned to capture market share with an affluent customer base spread across several cities. The full interview is below:
IPO Edge: For those who are familiar with Blade in the U.S., how does the experience compare? Is the phone App the same and does the experience have the same feel?
For people familiar with Blade in the US, booking Blade in India is similar. The website and mobile app are built from the same template. Post booking, the Blade experience is very similar to the US experience with customers interacting with Blade hostesses at the Blade lounges designed as per Blade brand standards before their flight. The quality of the Blade flights from a safety and customer experience angle are as per Blade US safety and brand guidelines.
IPO Edge: What makes India well suited for intercity helicopter travel?
Globally, India is one of the most congested urban spaces, with annul urban congestion costs amounting to a whopping $22 billion. India’s economic growth rates necessitate an urgent solution to its urban air mobility needs. In our pilot launch, we fly between Mumbai and Pune, both commercial hotspots in India. And the road travel time of approximately five hours is cut down significantly to approximately a 40-minute Blade flight.
In addition to business travel, leisure travel and religious pilgrimages in far-flung terrains provide excellent opportunities for air mobility. Given the convenience that short haul air mobility provides, social acceptance is inevitable. India has emerged as tourism powerhouse over the recent years with Foreign Tourist Arrivals crossing the 10 million milestone in 2017. The growth trend is expected to continue over the coming years. Short-haul air mobility would provide immense convenience to tourists looking to visit the abundant attractions in India. India has emerged as one of the fastest growing business travel markets with a business travel spend of $37 billion in 2017, a figure likely to touch $46 billion in 2019 at an annual growth rate of 11.5%. Annual growth for business travel spend in India has been the highest for business travel markets globally. While India is the seventh largest business travel market globally, it is projected to be the top five markets by 2022. The premium that business travelers attach to time saving, especially given the adverse urban congestion in India facilitates the rapid acceptance of short haul air mobility.
IPO Edge: Do you find that customers come back for additional trips after trying the service?
The customer response to the pilot launch has been excellent. More than two-thirds of our passengers have chosen to fly with us for additional trips within the first 100 days. Based on feedback from passengers, we have introduced a booklet of 30 tickets which our frequent fliers find very convenient.
IPO Edge: Helicopter rides are usually reserved for the wealthy in the U.S. Are there enough possible passengers in India to keep helicopters full?
While ticket pricing for Blade in India reflects the cost of convenience and time saving, the affordability today is within range for the top 3 million affluent customer base in India. As an example, our ticket price for Mumbai to Pune (a 37-minute journey) is approximately $200. India has a significant affluent customer base spread across diverse cities.
As we move forward, we would be deploying craft with larger seating capacity which would further help improve the affordability of tickets. The technological changes over the next few years, with the introduction of e-VTOLs is expected to disrupt ticket fares. In a densely populated country, poised for high economic growth rates, the constraint of severe road congestion can be effectively tackled by short haul ‘urban air mobility’ solutions.
IPO Edge: What is the average ticket price and how does it compare to other countries?
A 37-minute helicopter ride between Mumbai to Pune is priced at $200. We are introducing a Bounce product (airport to city center) in a new geography. This would reduce a three-hour road travel time to a 20-minute helicopter journey, estimated ticket price at $100.
The prices in US are higher. In India, we have the benefit of lower overhead costs and a significantly larger passenger base.
IPO Edge: Can you tell us about your fundraising so far and what valuation the company has? Are there future fundraising plans?
Currently, the venture has been funded by the promotors, Blade US and Hunch Ventures. Our growth plan in India and the subcontinent are very aggressive. Top line revenues at the end of Year 4 is estimated at $200mn+. The growth strategy envisages an aggressive roll-out in India, fully leveraging the benefits of the first mover advantage. This would also need establishing a network of lounges and heliports across the country. Our business model continues to be asset light, we would be leasing crafts from operators for a committed number of flying hours per month.
We are currently in the process of raising a bridge round prior to a larger institutional raise.
IPO Edge: Do you plan to expand to more cities?
Below is the four-year geographical roll-out plan:
By end of Year 4, we plan to have heliports in 180 locations across 160 cities in India and subcontinent.
IPO Edge: Are there other potential needs for helicopter travel besides business such as holiday transportation?
In India, visits to pilgrimage centers, which are typically situated in far flung areas, and mountainous terrain is very popular with a large segment of our population. The elderly and the infirm, for whom pilgrimage visits are a ritual, have to undertake tedious and long hours of road travel. As an example, the shrine at Tirupati has close to 100,000 pilgrims visiting every day. Helicopter travel at affordable price points would be a huge boon for this segment.
India has a large number of tourist spots and heritage sites (for example the Taj Mahal at Agra) which are very popular with both domestic and international tourists. A large number of these attractions involve arduous and time-consuming road travel. Local state governments are very keen to work with Blade in promoting heli-tourism in their markets, promising a huge boost to tourism revenue.
IPO Edge: What does the competitive landscape look like in India? Are there other similar services?
Blade is pioneering ‘by-the-seat’ urban air mobility. Currently in India, helicopters are primarily used for oil and gas commercial flying and a small segment is owned by HNIs for personal/commercial usage. There are a few operators who focus on charters of the full craft to political parties, industrialists and governments.