The country has allowed foreign airlines to gorge themselves on its passengers, making these airlines global behemoths. While consumer choice is important, the Government must allow Indian carriers to spread their wings as well, instead of always trying to protect Air India
A week or so ago, a news item appeared which said that the Dubai-based airline Emirates carried more passengers internationally in and out of India than the Indian state-owned Air India and its subsidiary, Air India Express. And these statistics were one year old, for the period 2011-2012 when Emirates carried 4.5 million passengers out of India, compared to Air India’s 4.1 million.
While, it is true that the Mumbai-based Jet Airways carried slightly more passengers than Emirates, the fact is that two out of every three passengers flying international flights into and out of India prefer to use international airlines rather than domestic Indian carriers. And according to the latest news reports, the Abu Dhabi-based airline, Etihad, has demanded a massive increase of almost four-fold in its seat rights into India, as a pre-requisite for its investment in the heavily indebted Jet Airways.
Sensibly, it appears the Parliamentary Standing Committee on Civil Aviation seems to have decided that enough is enough, and is questioning the Government’s decision to dole out flying rights to Arabian carriers so generously. A few years ago, this columnist had travelled with Emirates on their inaugural Dubai to San Francisco non-stop service. It was the first flight but the plane was full, and a majority of the fare-paying passengers were from the Indian subcontinent, most from India. Interestingly, Sheikh Saeed Maktoum, a member of the ruling family of Dubai and the suave and charismatic chairman of Emirates Airline who also travelled to San Francisco stayed on in the western US city after the first flight to interact with some of the journalists. As both your columnist and Sheikh Maktoum smoked, we spent a lot of time chatting out our hotel in the smoking area.
The Sheikh smiled when he was asked what role India had played in the development of Emirates into the global behemoth that it is today. He replied that when Emirates started in 1985, with a couple of aircraft leased from Pakistan International Airlines, it flew its first flights to Mumbai, New Delhi and Karachi. Initially, the airline covered the massive trade traffic between India and Dubai but as it grew westward of Dubai in the 1990s, initially to the United Kingdom and elsewhere in the Arab world, Indians formed a bulk of the traffic.
The reason behind this was the restrictive policies the Indian Government had imposed on European carriers flying into India. Although private Indian airlines had started by then, the Government kept Air India and Indian Airlines’ international monopoly. But to gain additional flying rights for the state-owned carriers to Dubai in particular as the sector was and remains a highly lucrative one, the Government allowed Emirates further flying rights into India.
As Emirates expanded, its fares actually went higher, and the airline started carrying less and less of the low-yield (as low-fare classes are known) labour traffic to the Arab world, passing on that traffic to the Indian state-owned carriers. Emirates beefed up its Business Class product and its rapidly expanding network meant that it attracted high-yield Indian connecting traffic. Wanted to get from New Delhi to Casablanca or lagosIJ Emirates was usually the only choice, and it pretty much remains that way.
There is a long-standing joke in the aviation community that the Emirates is India’s national carrier and Dubai, India’s largest airport. Credit goes to Sheikh Maktoum who has built a massive airline that is today scaring even established European mega-carriers such as Air France-KlM, British Airways and lufthansa. Emirates has the world’s largest fleet of large aircraft, it is the largest operator of Boeing’s 777 and has also placed an order for 80 of Airbus’ giant A380 aircraft. This airline was built on the back of Indian passengers but now India is only ‘one’ of its many global destinations.
Even though the Atal Bihari Vajpayee-led Government allowed Indian carriers to fly abroad, the crazy boom years of the late-1990s has left Indian carriers in a perilous financial situation. As we all know, Kingfisher’s long-drawn demise, helped in no way by an ill-advised takeover of Air Deccan, has finally put the brakes on growth and the airlines are finally consolidating their financial positions. Yet, the Government has made it extremely difficult for some of the private carriers particularly by raising objections whenever they demand additional flying rights or wish to join a global airline alliance because Air India raises ‘objections’ every single time.
Sometimes, it appears that the Ministry of Civil Aviation is the Ministry of Air India; yet, it has not been able to convince the Indian flying public to use the national carrier instead of Arab carriers. This is really sad because, the Indian flying public, a great many of whom are taxpayers, have been funding Air India with their taxes. So one should think of any discounted fare on Air India, as a sort of tax refund.
The argument about whether the Government should be in the business of running airlines can go on for a long time. While Emirates is owned by the state of Dubai, it is (now at least) a massively profit-making venture and has helped funnel massive amounts of tourists, talent and money into the city-state. The same holds true for Singapore Airlines and even Etihad is also likely planning to do the same. Even China, where the state owns most airlines, has allowed different state-owned airlines to compete with each other, and has also built up China Southern and China Eastern to become the two largest airlines in Asia, primarily due to China’s massive domestic market. There might be little reason for the Government to run hotels but airlines can be economic tools.
Yet, private airlines have played a major role in India. They offer consumers choice and connectivity options that one state-owned carrier can’t. Restricting their growth in the name of protectionism is vain and silly. There is no reason why an Indian carrier can’t become a large global airline. For that, one-sided air service agreements have to end, and where such agreements already exist, Indian carriers should be encouraged to use these routes.
It appears that of late, the Ministry of Civil Aviation has become more generous with route allocations — Jet Airways, Indigo and SpiceJet have been given all sorts of new route rights, mainly in the Asian neighbourhood. In fact, if route and allocations are to be increased for a particular country, Indian air carriers should have a say in the decision. Only if Indian air carriers can also take advantage of increased flying, should seat allocations be enhanced.
As for Air India, it should be encouraged to open more routes, which is what the Boeing 787s were supposed to do, although these aircraft could well be back in the air soon. If the Government is serious about running the airline, it should cut away the flab and run it like a professional entity instead of your typical loss-making public sector company. Thankfully, despite the chaos of the Kingfisher closure, the Union Ministry of Civil Aviation is increasingly becoming a ministry that is concerned with the flying public. It should now also look at further promoting Indian aviation.