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‘Air-India should pull up its socks’

From zero-fare tickets and over 40% sectoral growth not so long ago, why is Indian aviation in such a bad state? Samiran Saha examines...
Hindustan Times | By Samiran Saha
UPDATED ON JUL 05, 2008 11:01 PM IST

From zero-fare tickets and over 40% sectoral growth not so long ago, why is Indian aviation in such a bad state?

I am very very concerned at the state of the sector now. A whole new class of people who took to air travel have been affected. I do acknowledge that the government cannot control the steep hike in aviation turbine fuel charges.

It is, however, the duty of everyone from the states, the Centre, the oil companies and the airlines to work prudently to keep the impact in check. The airlines need to devise ways to cut cost and pull the industry out of the fiscal ill health that it is slipping into.

In India, turbine fuel cost is among the highest in the world. Why don’t the states cut sales tax?

The states view air travel as an option for the elite, and therefore not enough thought is being given to bring down the levies... . We have asked the states to lower the levies. What the states do not realise is that lowering ATF taxes will not only bring in more economic activity, but will facilitate faster development.

What do you think the airlines should do now for sustenance?

Competition is imperative to any industry. Having said so, the airlines should not go overboard with unsustainable fares. ATF has caused havoc to the airline business globally. I too feel the industry at this moment should try every possible way to reduce costs and rationlise routes.

When do you predict a turnaround?

The turmoil will take its toll on the sector. However, if oil prices stabilise at the present or lower levels for some time, and the airlines get their acts together, the situation would improve. Unfortunately, since the sector is deregulated, the government cannot ask them the fares they should charge or change capacity. In their own wisdom, they should take very calculated and calibrated decisions.

The state-owned carriers are also feeling the heat. Their cumulative losses are Rs 2,500 crores a day. What do you think they should do?

Air-India should pull up its socks if it wants to stay in competition. There is always scope for improvement.

These are not normal times, and such times need extraordinary efforts, which I am sure the two state-owned carriers are taking to be a force to reckon with.

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