• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

THE EASING OF the rules for air-charter operation, as announced by the Civil Aviation Minister, Mr Shahnawaz Hussain, is to be welcomed because of the added convenience it will afford the flying public. Under the new policy, Indian passport holders will also be allowed to use charter-flight facilities, and the flights will be allowed to land at any airport with Customs and immigration facilities. Dollar expenditure restrictions have also been done away with. As is clear, these steps will improve the prospects of tourism in the country, the only point of concern being that the avoidable delay in effecting the change in policy has hurt the economy to some extent.

Indeed, as far as the civil aviation sector is concerned, delays in taking important decisions are seriously affecting the prospects of both Indian Airlines and Air India, both of which have not been doing well in recent years regardless of the general downturn in the international aviation sector. Two important policy issues can be cited, the protracted dithering over which has hurt the recovery process of the domestic civil aviation sector. First, the "privatisation"' of major airports has been stalled for quite some time over legal technicalities, stunting their development potential. Second, the interminably long process of expanding the fleets of the two carriers (both at the levels of the carriers themselves as well as at the Government) has delayed the recovery process of the airlines, which ought to have as their core a young, modern fleet of aircraft.

The impact of the second policy-level delay has had a serious impact on the finances of the airlines, increasingly forced to lease aircraft to maintain operations at respectable levels. For instance, a third of Air India's fleet is leased (nine against 20 of its own). The future is bleaker, for, according to airline officials, a "critical mass" has been reached as regards the leased route to increasing seat-availability, and any further increase in the number of leased aircraft will make operational costs unacceptably high. Given that the new aircraft acquisition plan (of 17 long-haul, 250-seater, aircraft) will take two-three years to implement (assuming the Cabinet approves the finalised plans post haste), the next two years will probably turn out to be even more difficult for the airline before things start looking up.

It is against this background that the Government stand — as articulated by the Civil Aviation Ministry secretary — that India needs "to follow liberalisation in the aviation sector in a manner that the domestic aviation industry does not become extinct", should be seen. Clearly, the extinction threat is coming not from outside but from within, possibly (as one school of thought has it) from vested interests which do not want Air India and Indian Airlines to become efficient and turn into formidable business competitors. It is perhaps not surprising that even in the domestic civil aviation sector, Indian Airlines is (technologically) falling behind its privately-run competitors, a phenomenon for which only the authorities are to blame (including the policy of mandatory flights to the North-East and elsewhere).

Send this article to Friends by E-Mail
Comment on this article to BLFeedback@thehindu.co.in

Stories in this Section
Caught in turbulence

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line