The Hindu Business Line : Bridging the Gulf

Passengers travelling to West Asia should be pleased that they will have a slightly wider choice, now that the government has allowed Jet Airways to fly to four cities in West Asia, ending the three-year moratorium on India’s private airlines operating to cities in the region. Yet they should be wondering why their options are limited to these four cities and to just one private airline. It would seem that the government is still finding it hard to let go of the cont rols, and the urge to protect the public sector carrier for whom this is an extremely lucrative sector. It was in pursuance of this that the government three years ago stipulated that private airlines must have a five-year track record and a fleet of at least 20 aircraft to get the nod to fly abroad, and even then not to the Gulf region. But Air India and Indian airlines did not exactly make full use of this privilege. With their limited fleet, they offered barely half the capacity they were entitled to under bilateral agreements with the respective countries, and merely succeeded in ceding market share to airlines based in the Gulf.

It is, therefore, curious why in the face of such under-performance the government continued to keep the lid on private airlines. More curious is the fact that now having decided to lift the ban as promised, it should choose to restrict the freedom for Jet Airways to just four countries, and leave for later consideration flights to cities such as Dubai, a popular destination and transit point for many Indians.

For many years the government has protected domestic producers from foreign competition as a matter of public policy, even if that has meant denying consumers the choice of getting goods or services overseas, often at cheaper rates. In this case, blocking the Gulf routes to private airlines amounts to not just denying them an otherwise legitimate role but also ironically provides foreign airlines, some of which do not meet the same eligibility criteria, an opportunity to dig their claws deep into the fast-growing Indian market. It is true that three years ago, the government chose to place these tough conditions on aspiring private airlines for credible reasons: the public sector carriers were constrained by an old fleet and uncertainties hung over their merger. New aircraft have since begun arriving, the merger is a done deal and the rationale for continuing protection may have just disappeared. It may be appropriate now for the government to remove once and for all the unnecessary shackles it has placed, not just on Jet Airways, but on all private Indian airlines. If they are fit to fly the domestic skies, there should be no reason why they should not offer services on international routes.

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