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Come, fly the skies

This year could well turn out to be the year of civil aviation, in India and the world, says V. JAYANTH.

@ CHRIS SHELDON -- ENGLAND

Faced with fierce competition, Air India is all set to embark on an aggressive expansion programme.

IT's clear and open skies all of a sudden. And here's why. The unveiling of the "Big Bird" — the Airbus A-380 — in France recently, the steady but confident march towards an open skies regime in many countries, the birth of more low-cost, no-frills airlines and a clear southward movement in air fares will soon set the pace for the aviation sector.

In India too the aviation sector holds promise. Growing numbers of foreign airlines are wanting to operate to the Indian metros; the Civil Aviation Ministry has announced a limited open skies policy and even allowed two of the country's domestic/private airlines — Jet Airways and Air Sahara — to fly abroad, till now a right and a monopoly of the public sector airlines, Air India (AI) and Indian Airlines (IA). A new aviation policy is very much on the cards and the Minister of State for Civil Aviation, Praful Patel, has adopted an "industry-friendly" approach in this context.

No level playing field

In the emerging global scenario of competition and liberalisation, India cannot afford to remain "closed" territory in the aviation sector. The time has also come for the Government of India to unfetter AI and IA, so that they can compete with the private airlines on a level playing field. Yes, that is the situation now. The public sector is urging the Government to provide/ensure a level playing field, and not the other way around.

In 2004, Jet Airways and Air Sahara began flights to Sri Lanka and Nepal.

The next couple of months may see these two airlines ready and cleared to fly to other foreign destinations, except West Asia, which will remain, for at least the next three years, the domain of AI and IA. To begin with, Jet and Air Sahara are planning operations to Singapore and Kuala Lumpur, Malaysia. When they are better equipped — in terms of aircraft, crew and a base — they may fly to Europe and the United States.

These developments are bound to spark a revival in the industry.

Fleet expansion

The aircraft manufacturers will also get busy again providing not just the Asian, but other continental airlines the kind of medium and long range aircraft they will need for such expanded operations.

AI and IA have taken the initial steps to embark on their fleet expansion programmes, a move that may see the induction of a combination of Airbus and Boeing aircraft.

AI is also getting ready to launch a low-cost subsidiary (Air India Express) by summer to take care of its shorter routes so that it is able to tackle the competition within the region.

Similarly, IA is close to wrapping up a major aircraft acquisition deal, to enable it to take on the fierce competition and to step up domestic and regional operations. This move should also help its subsidiary, Alliance Air, now burdened and handicapped by an aging fleet that has almost outlived its life span. Though there is a sense of urgency in the air, the wheels of the government seem to be turning exceedingly slow in this.

Low cost operations

The first and direct benefit from these developments in the aviation sector will accrue to passengers. The birth of India's first low-cost, no-frills airline, Air Deccan, has jolted the existing and larger players.

Air Deccan's strategy of offering unimaginably low fares on flights to the metropolitan cities — even if in limited numbers — has shaken the established airlines. These established operators, even now confining themselves to offering "Frequent flier" concessions and "Apex" fares for early bookings, have been forced to think of new solutions and offer more attractive packages. Air Deccan, for instance, offers a few seats every day at Rs. 500 or Rs. 700 (with taxes) for a Chennai-New Delhi (about 2,194 km) or a Bangalore-New Delhi ticket. Of course, the seats under this scheme are very limited and get booked weeks ahead of schedule. But the Bangalore-based airline now has a graded tariff that ascends as the date of departure nears. It works on a slab basis and a proportional allocation of seats. This has not only made air travel more affordable, but has also enhanced the occupancy of the aircraft for the airline. But this is just a part of the story. There are more important and critical issues that need to be addressed.

Issues of concern

In the anxiety to expand and harness the market potential for air travel, airlines are in a hurry to buy more aircraft, or at least lease them to meet short-term needs.

Questions such as a state of preparedness, air safety, the capacity of airports to handle this growth in traffic and, above all, the availability of trained manpower for all the requirements of the aviation sector remain unanswered. For now, it seems to be just "poaching" from the established, and especially the public sector airlines. (For the private airlines, AI and IA have become fertile grounds for recruitment of personnel even though they are developing facilities to train their own staff, especially flightand cabin crew).

Alongside, there has to be a corresponding build up in the infrastructure — as airports, transit facilities, transport and communications. All this calls for planning and coordinated action.

The Government of India has cleared the construction of two greenfield airports at Bangalore and Hyderabad, besides clearing joint venture development of the New Delhi and Mumbai airports. Though Chennai airport, which already caters to 14 foreign airlines in addition to burgeoning domestic traffic, has been left out, it needs to be upgraded before it is too late. More important, the second and third-tier towns need better airports and more handling facilities. These will include the State capitals and chosen tourist or passenger destinations.

The Governments at the Centre and the States, the Airports Authority of India, the private sector hospitality industry and the travel and tourism trade have to work in conjunction to enable the projected growth to be planned and smooth.

A jumbo revolution

THE introduction of the "Super jumbo" or the Airbus A-380, which can carry 35 per cent more passengers than the Boeing 747, will provide fresh impetus to inter-continental traffic. While such unprecedented seating capacity is bound to make costs of flying this aircraft cheaper per passenger, airports across the world, and especially in India, will have to enhance their facilities to receive this massive aircraft, whose tail alone is as high as a seven-storey building. Airbus claims to have orders for about 150 aircraft already and cites having to sell just 250 units to recover the cost of developing this aircraft.

Across the seven seas, the A-380 will spur new interest in travel and tourism. But in the midst of this growth and expansion, the aviation industry, and especially airlines, cannot afford to make any compromises on safety.

The role of a regulator

It is in the open skies regime and the environment of competition that the role of a regulator becomes critical. Be it in upholding safety standards, maintenance discipline, training crew or in fare structuring, there needs to be an impartial authority which has to maintain the balance. There can be no compromise in ensuring aircraft safety and maintenance practices, or the discipline required of the flying crew. Similarly, no airline must be allowed to undercut fares for the sake of taking on the competition. Certain minimal standards and structures have to be maintained, within which airlines can be free to capture passengers or freight traffic. Whether the existing structure of the Director General of Civil Aviation (DGCA) meets these requirements or will have to be restructured to assume the role of a regulator needs to be examined. Above all, airlines and regulator alike must be far removed from the political establishment. There should be no political influence or intervention in the aviation sector — for or against the public or the private sector. Only then can there be a level playing field.

Exciting days are ahead and 2005 may well turn out to be the year of civil aviation, in India and the world.

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