Real people don?t fly
With the removal of restrictive policies and AAI control, the masses could start flying, writes Barun Mitra.india Updated: Feb 07, 2006 04:56 IST
The political debate over private-public partnership to modernise Delhi and Mumbai airports has starkly exposed the virtual bankruptcy of ideas among the Indian political class. With its vehement opposition to privatisation of airports, the Indian Left has shown why its brand of politics will never take off in India. But the Congress, which takes credit for initiating economic reforms 15 years ago, seems to have lost the ability to reap political mileage out of even sensible policy reforms. The present turbulence over airport privatisation provides a perfect opportunity to take a major economic policy issue to the people — a creative political campaign to turn air transport into a mass transport.
At the time of Independence, there were around 450 airports in the country, many of them dirt tracks, but operational. Air transport had the potential to become mass transport. But the sector was shackled by nationalisation. Consequently, air transport became synonymous with the elite and the privileged, while the masses were advised to either minimise travel, or risk their lives and limbs during each journey in overcrowded and dilapidated vehicles and trains. So, today, in a country of over one billion, barely 40 million passengers can afford to take to the skies. This is, of course, a big improvement on the 10 million who could afford this luxury 12 years ago, when private airlines were first permitted to fly again within India.
While the entry of competing private airlines has opened the Indian skies for many people, the public sector monopoly of Airports Authority of India (AAI) — which operates airports and regulates the Indian sky — has remained. The Left claims that AAI is a profit-making public sector. But it ignores the fact that these profits come because of its monopoly status, and consequent ability to squeeze airlines and the paying public for every paisa, without any particular commitment to service. In this country, only 60 odd airports are operated for commerce today.
Civil aviation in India can fly to much greater heights, if only the deadweight of restrictive policies and AAI control is removed. Compare India with the world. Barely 4 per cent of all Indians would have flown last year, even if we make the unlikely assumptionthat each flier took only one flight each.
In the US, over 700 million passengers took to the skies in 2004. This is two-and-a-half times its entire population. This is made possible by a network of airports that maps population density. For instance, in the state of New York alone, there are 19 primary commercial airports, over 90 operational airports and a total of about 150 airports — all this to service a population of less than 20 million.
If New York is too far away, consider China. Around 120 million Chinese flew in 2004. The country has 197 airports, of which 132 are commercially available. Forty-eight airports, including 25 trunk line airports and 23 regional and tourism airports, were built or renovated in the last five years. The Civil Aviation Administration of China (CAAC) has in recent years turned 93 airports over to local governments. It has allowed investment, including foreign investment, worth over US $ 10 billion in the development of airports. It is estimated that by 2020, the size of civil aviation in China will be second only to that of the US, rising from its present fifth rank.
In contrast, since opening the Indian skies to private Indian airlines, it took us eight years to start the construction of the new Bangalore airport. Five years were taken to approve the plan to allow private sector participation in the modernisation of Delhi and Bombay airports, expected to be completed by 2010. With only the Kochi airport operational under private management, and Hyderabad airport being built with private participation, it is legitimate to ask, can Indians really take to the sky?
Aircraft could be used for mass transport with a few basic policy changes. One, complete deregulation of airlines, airports and services like air traffic control, so that there is open competition among the various service providers. Two, allowing local and state governments to operationalise the hundreds of dormant airports that dot the country. Three, reforming the land laws in the states, so that private investors can freely decide whether to set up large or small airports, say within or surrounding the NCR, or create a new regional hub.
Investors would then be able to decide on the size of their airports, attract airlines operators who could then decide on the size of their aircraft and fleet, depending on whether there is a demand for a national, regional, sub-regional or local traffic.
In such a deregulated and competitive environment, passengers could no longer be held hostage by any airline or airport. Consumers would be empowered with much greater choices in terms of services and price. Finally, such bottom-up reforms would allow the spread of manpower skills, from management to pilots and ATCs. Competition in all spheres of air transport would make flying within reach of the masses. There would be no reason for the Delhi to Thiruvananthapuram air fare to be as expensive as that of Delhi to London.
For all the Left’s efforts, its support of the strike by AAI staff has shown that it favours one of the most privileged workforces in the country over the millions of Indians who may never enjoy similar benefits.With such a head-in-the-sand attitude, the Left in India can never do well politically. The tragedy is there seems to be no one else on the political landscape of India with the courage to empower ordinary Indians to fly.
The writer is Director of Liberty Institute, an independent think tank based in Delhi
First Published: Feb 07, 2006 00:24 IST