The Indian aviation sector in the past decade has faced some highs and lows, finally leveling off to a stage where major initiatives are needed to take the next leap.
While India is perceived to be the biggest and fastest growing market, where less than 1% of the 1-billion- plus people take to flights, the recent price war within the domestic airlines has raised a major issue of their sustainability.
The perception that India has backtracked on reforms, leaving little space for a level playing field for competing airlines, also needs to be corrected.
Air India, despite suffering enormous losses, continues to sell tickets below the operating cost. The government has allowed this situation to continue by bailing them out-but private carriers are now facing the heat as a result. Last quarter witnessed all but one airline suffering huge losses.
A delegation of all the private airlines in the country recently met the aviation minister and senior officials in the PMO, explaining their position and it seems Air India despite bleeding, refuses to relent.
Civil aviation should remain one of the priority sectors. The government can be credited with pursuing the major policy and reforms flagged during the NDA government, but not much has been witnessed in the last seven years.
Airport modernisation has seen few achievements. Not a single metro airport has been modernised by the Airports Authority of India. The deadline for Chennai and Kolkata airports continues to be extended.
Not just this, even the quality milestone is far inferior to what we see at the newly created Delhi and Mumbai airports (done by private entities). Of the 36 non-metro airports selected for modernisation, only half have been completed.
We have Dubai, Bangkok, Singapore and other cities emerging as transit hubs. Whatever little position Mumbai had as India’s hub is gradually dwindling.
Our airline tax structure needs to be looked at so as to help airlines offer cheap tickets through Mumbai and other hubs. Why should an international passenger choose Delhi or Mumbai if he has to pay an extra 10 per cent as tax?
Unfortunately, the policy today is so tuned, that we give more incentives to Indian passengers flying abroad than for tourism travel within the country.
Having said that the prospects are there for the aviation industry in India, which can still be denominated to be in it’s nascent state. The industry has seen sweeping reforms-the first was during Mr Madhav Rao Scindia’s tenure in 1990, the second during Mr Vajpayee’s tenure in 2003.
Several policy initiatives have to be put in place before we can finally see the third leg of reforms in the aviation sector.
(Rajesh Pratap Rudy is a pilot, former Union minister for civil aviation and a BJP MP)