The Hindu Business Line : Refurbishing the airports

BETWEEN ITS TWO reports, the second of which was released last week, the Naresh Chandra Committee has provided enough and more advice to the Government on what is to be done to redeem the civil aviation sector. Reforming it has not been easy. After the Air Corporation Act of 1953 was repealed in 1994 to allow private airlines to operate scheduled domestic flights, there has no doubt been a distinct improvement in the quality of services. Passengers have enjoyed the lower fares that competition brought in; on some domestic routes the fares are now even lower than what they were ten years ago, a fact that has truly widened the appeal of air travel. Yet the sector has to go a long way to reach its potential. The suffocating grip of government hampers investments in aircraft by the two public sector airlines, and holds back the aspirations of the private airlines to fly to international destinations even when foreign airlines have the freedom of the Indian skies. The Committee has suggested that the private airlines be allowed to use the bilateral traffic rights not exercised by the public sector carriers because of inadequate capacity. But that would be a half-measure; there is no reason why private airlines should not also have the right to compete on level terms with Air India or Indian Airlines.

Less reform has happened on the ground. It is a sad comment on the state of airports that out of the 122 airfields maintained by the Airports Authority of India fewer than half of them are used by any airline; some others are functional but handle no more than one or two flights a day. The four largest airports account for almost 42 per cent of the Authority's revenue. Even though airport charges are among the highest in the world, only ten airports in the country make profits. The others remain poorly equipped, with poorer custom and mounting losses. In spite of that there has been little or no attempt to encourage the flow of traffic to these lesser airports.

The Naresh Chandra Committee is right in recommending that these airports be unbundled and hived off into multiple joint ventures. In its first report the Committee had suggested these airports be privatised, but in the light of the political reservations on privatisation, it modified its prescription in the second report to floating them as joint ventures. The prime intent must be to ensure that these secondary airports get the attention they each deserve. With better facilities and marketing, many of them could attract enough business to become profitable, not to speak of the economic fillip they would provide the towns they provide connectivity to. The Committee envisages the larger airports parting with some of their revenues to subsidise operations at the smaller ones, but once the airports are made independent of one another, it would be a challenge to develop a practical framework in which this cross-funding can materialise.