The Hindu Business Line : Getting the Indian air traveller on a high

THE eventual implementation of the slew of proposals cleared by the Union Cabinet on December 29 should go a long way in benefiting the international air traveller.

Carrying forward the reforms process in the civil aviation sector, the Cabinet decided to allow private airlines which have a minimum of five years experience and a minimum fleet strength of 20 aircraft to fly to all parts of the globe except West Asia, which will remain with Air India (AI) and Indian Airlines (IA) for the next three years. This decision in itself could ease the trouble that an average passenger faces when travelling to-and-from India.

The implementation of the decision, which should commence within the next few months, will immediately benefit Jet Airways and Air Sahara both of which meet the criteria and should, therefore, be allowed to fly on more international routes. The two private sector airlines are said to be firming up plans to launch flights to the Far East.

The Air Sahara President, Mr Rono Dutta, recently said that the airline would look at operating a daily flight from Mumbai, Hyderabad and Delhi to Singapore, Kuala Lumpur, Bangkok Hong Kong and London.

Similarly, Jet is also said to be firming plans for more international flights, which could see it offering flights to destinations in the Far East.

The start of the flights to more international destinations by the two private sector airlines will also help correct the current imbalance, with international airlines carrying a large portion of India's out-bound traffic. Take the India-UK route. Even if Air India were to operate as per its operational plans up to 2006-07, there would still be a gap between the entitlement and utilisation of traffic rights.

In this sense, the Cabinet decision is endorsing what is being done even by small countries such as Thailand, Iran and the United Arab Emirates (UAE), which have allowed multiple airlines from their countries to operate on international routes thereby ensuring more economic advantages for these countries.

The Cabinet decision is also likely to impact airfares, again for the benefit of the passengers. The decision to do away with the practise of demanding compensation from foreign airlines by way of commercial agreements mandated by the Government in a phased manner should not only encourage greater connectivity but also ensure viability of operations.

Foreign airlines have often cited the commercial agreement clause as the reason for airfares to-and-from India being high compared to what is charged elsewhere in the world for a similar flight.

Beneficial though all this is going to be for the consumer, the Cabinet decision does raise some important questions. First, is the decision to allow private airlines to fly on international routes really providing a level playing field for all the players? If the Government was really keen on this, should it not have taken steps to solve Air India 's and Indian Airlines' problems in acquiring aircraft for starting more flights?

Take the case of IA. Its board cleared a proposal to acquire 43 Airbus aircraft in April 2002 and it is still waiting to get the aircraft it badly requires. It is almost the same case with AI.

The airline last purchased new aircraft, the Boeing 747-400, about a decade ago and since has been managing with leased aircraft.

However, senior government officials are categorical that the fleet acquisition plans of the two aircraft are on the "fast track" and should be cleared soon.

Second, doesn't the Government decision to go in for a three-year lock in for AI and IA to West Asia against the policy of liberalisation which it is keen to follow?

The Government has, however, argued that a calibrated approach must be adopted so that the national carriers get time to adjust to the new competitive environment, especially as most of the two airlines' operational revenues and profits on international routes accrue from the West Asia routes.

At another level, in many ways, the latest Cabinet decision only echoes what was offered to the private sector airlines in December last year.

On December 10, 2003, the National Democratic Alliance Government led by the then Prime Minister, Mr Atal Bihari Vajpayee had cleared a proposal to allow private sector airlines to operate flights to and from India to the six neighbouring countries.

Taking advantage of the window of opportunity, both Jet Airways and Air Sahara have already started regular flights to Colombo and Kathmandu. The private airlines will once again take advantage of this Cabinet decision, hopefully which will be to the benefit of the consumer.

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