Draft Civil Aviation Policy is a step in the right direction; but much remains to be done

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Draft Civil Aviation Policy is a step in the right direction; but much remains to be done

Saturday, 31 October 2015 | Kushan Mitra

After much consideration, the current Government has unveiled a draft civil aviation policy and ostensibly it has some very good ideas. It seeks to promote travel between smaller cities, contains proposals for small regional airlines, low-cost regional airports as well as promoting travel between India and other countries within a 5000-kilometer radius. The Government has also proposed to do away with the controversial 5/20 rule that required an airline to be at least five years old and have a fleet of 20 aircraft to be eligible for international flying.

Now, these are draft proposals and there will be much lobbying and back and forth before any of these proposals become draft policy. While the Government wants to promote air travel, their proposal to cap airfares between smaller cities to Rs2500 is almost certain to be a non-starter, although following a subsidy model as proposed is practised elsewhere in the world as well. However, there are only 100 million odd domestic passengers in India currently, if one divides this number by four to account for return tickets and frequent flyers, it is reasonable to assume that there are only around 25 million people in India who fly annually. This number can easily be multiplied four-fold and that should lead to at least 300 million domestic passengers annually within a decade.

In essence, a tiny sliver of India’s population flies every year and the Government and airlines for that matter want more people to fly. Even if the Indian Railways eventually pushes through high-speed rail services, the first such services are at the very least a decade away. Rail travel while economical for a large majority of Indians, including the middle classes are a not at all competitive when it comes to time. Delhi-Mumbai; India’s busiest air route and also among the world’s busiest air routes is a two-hour flight (on a good day), including security checks and last-mile travelling, an average journey takes five hours. The fastest train still takes almost seventeen hours.

Travelling to the beaches of Goa by train for holidaymakers is an impossible task if the fastest trains take over 30 hours. If three days of a holiday go in travelling on a round trip of 4000 kilometers, you can understand why air travel is the only solution. The Government wants to double the number of air passengers in India in the next five years, and that is not an impossible task. Given the geographic size of India, flying should become a primary option for most travellers if the economy continues to do well.

Adjusted for inflation, and despite peaks during occasions such as Diwali and the new year, air travel is cheaper than ever before. Despite a semi-regulated market, airlines such as Indigo have thrived and under new (old) management so has SpiceJet. However, the Government has proposed increased flying rights for airlines on regional routes under 5000 kilometers in length. India has let several west Asia-based airlines gorge themselves and grow on her travellers. This year, the Dubai based Emirates Airline celebrates her thirtieth anniversary, this mega-carrier with over 100 Boeing 777’s and 50 A380 aircraft started with just two planes operating to Delhi, Mumbai and Karachi. This while our national carrier Air India has gone down the tubes and is in essence a taxpayer-funded luxury. With the proposed enhancement of bilateral rights, the withdrawal of 5/20 for international flying, flying to the UAE, Thailand and Singapore ought to explode.

There are some issues though. The Government wants to promote regional connectivity, and this is not the first time Indian Governments have attempted this. Airports have been built in places such as Jaisalmer and Pondicherry that lie empty. Proposing to set up several no-frills airports might make voters in those districts happy, but madcap airport expansion when a majority of travel is between large urban centres is not a smart way to spend money.

The Delhi-Mumbai sector now has over 70 flights a day with over 10,000 seats offered in each direction daily, this sector alone accounts for over a quarter of domestic passengers. Indeed, remove (India’s two most important urban agglomerations from the air travel mix and you would lose three-quarters of domestic passengers. These two cities, particularly Mumbai faces massive infrastructural constraints on air travel. The Navi Mumbai airport project has been speeded up by the Fadnavis Government and the Central Government, but Mumbai needed a new airport three years ago. And the Delhi-NCR region needs a new airport tomorrow, as the NCR spreads eastward, the districts of Western UP need connectivity, and the Jewar airport which is currently in cold storage ought to be dusted off and examined again post haste.

However, the brightest move in the draft policy was the move on helicopters. India has a severe shortage of civilian choppers, as elections are currently underway in Bihar a large number of civil choppers in india are currently stationed in Patna Airport. There are fewer civil choppers in India than there are in the city of Rio de Janiero in Brazil. India has only a couple of air ambulance helicopters for example. Promoting helicopter operators and private helicopter ownership is a smart move because these rotary-winged craft come in extremely handy during disasters.

The draft policy will be open to public comments and it is expected that some open house discussions will take place shortly. Unlike the IT draft policy, the Civil Aviation draft policy seems relatively well structured and once finalised could see a dramatic increase in Indian air passengers.

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