The Hindu : Opinion / Editorials : MORE OPEN SKIES

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Friday, Jan 07, 2005

Opinion

Opinion - Editorials

MORE OPEN SKIES

THE UNION CABINET'S decision to allow established private airlines to operate to foreign destinations with the exception of West Asia is on expected lines and represents another step towards a liberal open skies policy in the civil aviation sector. Initially, it was felt that after letting the private airlines fly to South Asian countries, the next step would be to extend their operations to South East Asian destinations. Instead of shepherding them in measured steps, the Centre has opted to allow them into a wider theatre. The latest round of liberalisation has a few restrictive clauses — only those private airlines that have operated in the domestic sector for five years and have a fleet of at least 20 aircraft are eligible; and Gulf countries are out of bounds for another three years. Although only Jet Airways and Air Sahara qualify, this move should benefit passengers because any additional competitive pressure usually leads to a fare reduction. To that extent, the open skies policy now being pursued by the Centre and its Civil Aviation Ministry must be welcomed.

There can be no two opinions on the need to open up the skies. When it is left to the private carriers, they will tend to operate only in the viable and profitable sectors. They can now look at South East Asia, Africa, Europe, and even the United States. While the Government will take some time to formalise the procedures, the two eligible private airlines will have to equip themselves for the challenge that lies ahead. Their fleets may be new but the aircraft need to be modified or new ones inducted to suit international operations. They cannot afford to copy Indian Airlines, which continues to fly the same fleet on both domestic and international routes — without in-flight entertainment and the other perquisites and frills associated with such flights. Working out an optimal ratio between international and domestic operations and deploying the requisite number of aircraft and crew are tasks that the private airlines need to address over the next few weeks or months. They are disappointed that this round of opening up the skies has kept the lucrative West Asian market out of their reach, but that seems to be for good reason.

This is the only "protectionist" measure that the Government has taken in the interest of the two national carriers — Air India and Indian Airlines — for whom the West Asian operations provide substantial profits. The next challenge will arise when bilateral aviation agreements are negotiated with other countries. But the Centre must realise that protectionism is not the answer to a competitive environment. At this stage, it may be imperative. The ultimate solution is to make the two national airlines competitive. Unless the Centre empowers them and enables them to augment and renew their fleet, they will not be in a position to stand up to the growing competition, both from international airlines and domestic private airlines, which will now fly out of the country. The national carriers are left with the impression that being public sector has now become a handicap, with successive Governments at the Centre taking decisions that are more favourable to private operators. It is a far cry from the monopoly status they enjoyed; they are now reduced to demanding "a level playing field." Rules and norms are stringently applied to them while the competition escapes from many of them. All the uneconomical sectors in the country are left to Indian Airlines while the private players cream away the traffic on the major metro routes. This situation needs remedying on a priority basis.

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