The Hindu Business Line : Bonanza for the flying public

There can be no two views on the fact that the new open skies policy taking shape will be of great help to the flying public through lower fares and higher efficiency in inflight services, baggage handling, and more convenient connections.

THERE is little doubt that the Prime Minister's declaration at Bali on October 8 opening up the Indian skies to Asean airlines represents nothing short of a major revolution in the country's domestic civil aviation policy.

This is particularly clear to those who have followed in some detail the twists and turns of the controversy surrounding the attempt of the Tatas some years ago to start a domestic airline in association with Singapore Airlines and, of course, the formulation of the nation's domestic civil aviation policy which, importantly, is still in the works even after the lapse of years. Indeed, ever since Mr Vajpayee's Bali initiative, things have moved almost at breakneck speed as far as changes in the nation's domestic civil aviation policy are concerned. First, on October 8 there was the Prime Minister's announcement in which he made it clear that the "open skies arrangement" was "a unilateral move by India".

Under this arrangement, Asean countries would be allowed to operate daily flights to the four metros of New Delhi, Mumbai, Kolkata and Chennai. This apart, there would be no restrictions on the number of flights to 18 Indian tourist centres among which are Bhubaneswar, Patna, Lucknow, Guwahati, Gaya, Varanasi, Khajuraho, Kozhikode, Amritsar, Visakhapatnam and Tiruchi.

Was the Prime Minister's Bali announcement just Asean-specific, or was it a reflection of a larger change brewing in the national domestic civil aviation policy? A clue was provided on October 9 by the Union Minister of State for Civil Aviation, Mr Ravi Pratap Rudy, when he said in New Delhi that the canvas was perhaps much wider.

He is quoted as having said: "The Prime Minister's proposal at the recent India-Asean summit will herald (more) such bilaterals with other countries. The Government was aware of the demands of various countries and airlines, and we will go in for a comprehensive open bilateral policy".

More important, he is reported to have said that the step would be the "beginning of a commitment" to an open skies policy, which would "revolutionise" aviation and tourism in the country. In fact, he revealed that that his Ministry had "recently" held meetings with the Tourism and External Affairs Ministries "to draw up a new liberal bilateral policy".The next concrete policy step was taken on October 21 when the Government allowed full freedom to the nation's private domestic airlines to operate flights to Colombo, international flights till then being the sole preserve of the public sector airlines, Air-India and Indian Airlines.

The sweep of the associated change in aviation policy is apparent from the details of the agreement — reached between Mr Vajpayee and the visiting Sri Lankan Prime Minister, Mr Ranil Wickremesinghe — which indicate, among other things, that both the countries have done away with the existing requirement of commercial arrangements between their respective designated carriers. As one senior Civil Aviation Ministry official is reported to have said: "There will be no control on the carriers. They are free to mount as many flights as they want to Sri Lanka. There will also be no financial arrangements with the state-owned airlines. It is going to be a free sky for them".

The extent of the Colombo "splash" in the domestic civil aviation sector is, therefore, clear. But the far more important point is that, according to some observers, Colombo may be only the harbinger of things to come as far as overall national policy is concerned.

In fact, in consonance with the Civil Aviation Minister's pronouncement on the policy on bilaterals (cited above), they expect an official decision soon, which will allow private airlines to fly to other international destinations as well. Indeed, the Naresh Chandra Committee, set up to draft the new civil aviation policy and whose report should be finalised by the end of November, is expected to recommend "full freedom for private airlines to fly international routes".

Since, as a general proposition, this is an objective the civil aviation policy should always target (that it has not been the case till now is an entirely different matter), the point cannot be over-emphasised that the emerging policy should be backed to the hilt. Conversely, every objection that is being made today vis-a-vis the new direction being taken by national policy on domestic civil aviation should be seen as an attempt by vested interests to protect their turf and, in the process, prolong the life of a system which has not benefited the average Indian flyer in the way it should have.

The plain fact is that none of the Indian airlines (private and public) flying the nation's skies today is doing well. Of the two private airlines, one does not publish its figures on the ground that it is a closely-held company; the other has got itself embroiled in an unseemly controversy where its figures have been disputed at the official level.

As regards Air-India and Indian Airlines, to say the least, they are not in the pink of health. The emerging scenario regarding changing market shares, etc., will have to be seen within this general perspective, the quiet victim being the Indian air passenger who has to make do with choosing the "best" that is on offer.

What is certain is that, provided the new policy of "open skies" really takes wings and soars in the Indian firmament, the two private airlines will be the first to benefit economically primarily because of the relative flexibility they enjoy in the matter of increasing the number of seats available (mainly flowing from their more comfortable fleet positions).

Air-India, in fact, is already severely stunted in this sphere, which is adequately reflected in the large number of bilaterals, which it cannot work because of a shortage of aircraft (according to one unconfirmed estimate, around Rs 3,000 crore is being lost in revenue because of this inability). As far as Indian Airlines is concerned, last week its employees went on record thus: "For five years, the Government failed to clear the fleet expansion and modernisation plans of the two state-owned carriers. Now, that the airlines are crippled with an aging fleet, they are making wild accusations to justify the entry of private airlines into foreign airspace". (IA's maintenance costs, related directly to its aging fleet, have in fact risen from around 14 per cent in 1997-98 to more than 30 per cent in 2001.)

The Government's response has been firm but clear. On October 15, Mr Rudy went on record thus: "We cannot keep protecting IA and AI at the cost of the economy. They have to compete. We are there to support them." This support will now have to be speeded up in the sense that the interminable delay taking place in placing the orders for the new aircraft for the two public sector airlines will have to terminated and decisive action taken to increase their fleets.

If the national airlines have to compete effectively under the new policy taking shape, the effective wherewithal to do so must be provided to them by the Government. The direction of the emerging policy, however, should not be changed if only because the interests of the flying public is involved. After all, the consumer is always the king.

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