View: What government should do to make the common man fly

The reforms in the aviation sector in 1991 ended the monopoly of Indian Airlines and Air India and transformed the sector when a slew of private-sector airlines were given licence to fly. Again, when low-cost airlines took wings in 2003, they broke the cost barrier, revolutionising air travel by penetrating deep into the rural hinterland.

Sadly, while all sectors have grown by leaps and bounds, Indian aviation has become the sick man of India. Thanks to choking regulations, tough entry barriers, high fuel prices abetted by high taxes, inef cient public sector airports paving way for monopoly airports that are extortionist and lack of a long-term strategic policy, growth of aviation has again slumped. While one airline, Indigo, has grown due to the vacuum created by the collapse of King sher and Jet Airways and the shrinking of SpiceJet, the overall market has not expanded.

Multiple airports serve cities like New York, London, Paris and Washington, DC. The challenge in India is how to encourage a vibrant private sector without permitting cartelisation. Airports must compete like airlines to keep prices under check and improve the quality of service. The HAL airport in Bengaluru and the old government airports in Hyderabad and Kochi should never have been closed when new airports were allowed, to ensure competition. This must be borne in mind in the future.

Competition is good not only for customers but also for companies. In Nehru’s time, the entrenched old Bombay club, which was ill-disposed towards newcomers, had a stranglehold on the moribund private sector — you could buy any car as long as it was an Ambassador, any scooter as long as it was a Bajaj, any truck if it was a Tata, any Jeep if it was a Mahindra. But today Bajaj, Mahindra, Tata, Hero and TVS have all built worldclass companies and are cocking a snook at the Toyotas, Nissans, Hondas and Fords of the world.

Our bilateral and open-sky policies need to be rethought boldly so that major metro airports can become mega transportation hubs like Dubai, Singapore and London. Our existing airport monopolies shouldn’t shy of competition. And entrenched airlines must not lobby against new entrants.

The number of Indians who buy air tickets in a year is 140 million, which is a preCovid gure. However, they are not 140 million different individuals. That number comprises repeat yers of 35-40 million who form the bulk of ticket buyers. Thus, a measly 4% of Indians travel by air today, placing India alongside some poor African countries in terms of per capita consumption of air tickets. Brazil, Malaysia, Indonesia and China are way ahead of India.

While on my way to the US for an aviation conference in 2002, at Luton airport — one of thefive international airports serving the London metropolitan area — I saw an advertisement that the airport had own 13 million passengers a year. That hit me like lightning. All 40 airports in India ew as much then. On a Southwest Airlines ight in Phoenix, US, a heavily tattooed, burly man in shortand vest sat next to me with his family at the back. I learnt he was a carpenter visiting the Grand Canyon. That was my moment of epiphany. I did not have to be a rocket scientist or seek McKinsey’s validation. I decided India was ready and launched a low-cost airline on a wing and a prayer. It was a crazy idea but the atmosphere was conducive under the NDA government led by Vajpayee.The Startup India campaign is a laudable initiative by Prime Minister Narendra Modi but is largely restricted to technology companies. It must spread to other areas as well. With mega airports controlling air and ground space, it’s well-nigh impossible to connect small regional towns with large metros, stunting regional connectivity, despite the commendable UDAN-RCS initiative. Where slots are available, costs are prohibitive. Our air cargo growth is languishing. Hong Kong airport handles more cargo than all our 100 airports put together.

Air cargo integrated with road, rail and ports is the blood vessel of a growing economy. The irony is that while we have around 4,000 pilots and thousands of technicians out of a job, we import foreign pilots and engineers to push up our operational costs.

Finally, our Aircraft Act and Rules go back to 1934 and 1937 respectively, when helicopters and jet engines were not invented. Although frequent modifications are issued, the overarching mother Act and Rules are not keeping pace with modern technology in aerospace, increasing costs for the industry and, in effect, passengers.

At the same time, our DGCA cadre needs to be modernised, well-staffed, motivated and incentivised. Just as the Atomic Energy Commission and ISRO are headed by scientists, the DGCA must be helmed by an aviation professional from among their ranks instead of a bureaucrat who may have been heading an animal husbandry department earlier. All these require a comprehensive overhaul.

However, there’s a silver lining. India has an inexhaustible market and largely untapped potential. That gives hope, the invisible fuel of the economy. Only one question has to be asked by policymakers. What should the government do to make the common man fly? That will show us a way to the future we all aspire to.


Business Asia
the authorBusiness Asia

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