Financial Daily from THE HINDU group of publications
Friday, Feb 18, 2005
Financial Daily from THE HINDU group of publications Friday, Feb 18, 2005 |
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Airlines Move to form Nasscom-like body of domestic airlines K. Giriprakash
Bangalore , Feb. 17 IT has taken two of the newest players in the industry to moot the idea of forming an association of domestic airlines. But not all believe that such a body can become a reality. At a recent CII meeting, Mr Alex Wilcox, President and Chief Operating Officer of the yet-to-be-launched Kingfisher Airlines, suggested that an association of Indian air carriers be formed to fight for their causes. The Air Deccan Managing Director, Capt G.R. Gopinath, has mooted a broader industry body. He wants a Nasscom-like association in which all the players connected with the airline industry can come together. He plans to call a meeting next month of representatives of domestic airlines, travel agents, cargo agents, and even those connected with tourism to finalise the framework of the body. "I think such a body will help the industry to grow further," Capt Gopinath told Business Line. Mr Wilcox was more forthright during his presentation. "Needs of individual carriers can no longer be put above the needs of the industry. Let us fight our market battles in the market," he said. Mr Wilcox was confident that such an association is workable. "I have just mooted the idea. Hope it takes wings soon." But not all share the same confidence of Mr Wilcox. "There are too many vested interests in the industry for them to allow such an association," the Centre for Asia Pacific Aviation Chief Executive Officer for the Indian sub-continent and the Middle East, Mr Kapil Kaul, said. Mr Kaul said individual interests of some of the players would not allow them to come together under an umbrella. He said there are some players who want a status quo in the domestic market. An association will try to fight for everybody and demand a level-playing field. "If the cost of running an airline in the domestic market is reduced to international benchmarks, more international and big domestic corporates would want to enter the field. But that would not suit the needs of some of them," he said. Mr Kaul said aviation turbine fuel costs as much as Rs 22,000 per kilolitre in India whereas it costs half that in Singapore and Dubai. Likewise, the user-charges for an A320 are about Rs 30,000 in Mumbai whereas it is about Rs 8,000 in Bahrain and about Rs 10,000 in Dubai. "Once these are reduced, it will invite international players in the business," he said. This would mean more competition from players who have deeper pockets than those who are already established. "We are lucky because India is a good story and hence the industry is growing," he said. Mr Kaul said India must be one of the few countries which attract billions of dollars of investment in the industry but is yet to frame a comprehensive aviation policy.
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