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Airlines Web Extras - Economy Columns - Sticklish Issues Aviation: How to survive the turbulence
The Governments at the Centre and the States should come to the rescue of the airlines by rationalising the tax structure and reducing the disparity forthwith. Since crude prices have fallen, the Government should consider a reduction in ATF prices. The Government should also permit domestic airlines to import ATF from competitive sources. The management of the airlines should revisit the wage structure of their employees in view of the current turbulent scenario and talk to their employees’ representatives for moderation of wages. This will obviate layoffs and retrenchments. Airport charges and navigation charges have also gone up due to modernisation. The charges should be rolled back to previous levels. Airlines should trim frills and should go for cost-effective vegetarian food without sacrificing quality and refrain from major capital expenditure for now. — *R. Thiurmalai Muthu, email The aviation sector has belied the expectations of the common people. However this is for reasons beyond their control. It will be difficult for the aviation sector to survive the current turbulence without substantial cost reduction. Aircraft engines that consume less fuel must be invented. The Government must come forward to help the airlines by slashing taxes. Consolidation is another urgent requirement in aviation sector to help the smaller airlines and save them from collapse. It is enough there are two companies — one in public sector and one in private sector. The two can achieve economies of scale. The Civil Aviation Ministry must give thought to this. — K. K. Ammannaya, email Survival of the fittest theory of Darwin is equally applicable to airlines today. Profitability is the only benchmark for survival during these competitive times. Giving the customers what they want but at an affordable price is the modern mantra. On-time performance, unmatched service, qualitative and well defined passenger safety checks are of prime importance. — Jatinder Pal Singh, email
High fuel bill and employee costs have hit the aviation industry hard. About half of the airlines’ operating budgets go for fuel expenses. Uniformity in fuel pricing should be maintained. Liberalisation of the aviation sector has resulted in unhealthy competition for market share. — T.V. Jayaprakash, email The need of the hour is caution, pragamatism and confidence to survive the crisis. The management must take into confidence all staff and send out in clear terms its intention and what is expected from employees. A combination of operating (planning and scheduling), marketing and financial skills have to be taken to a very high performance level to weather the storm. — P. Rajesh, email The softening in crude oil prices might help the private airlines. The merging of two rival companies — Jet Airways and Kingfisher — will help in sharing passengers as many aircraft are flying half full. The Government should help private airlines tide over the crisis. — Venkatraman Ramjee, email The Government should consider ways and means to reduce taxes and surcharges to save airlines. While enforcing cost cuts, the airlines should reduce the dependency on foreign pilots. The Government should also consider using foreign exchange reserve to arrange for broad runways, developing roads, constructing large hangers and providing fog fighting machines, gadgets for handling late flight movements on credit to airlines. T. S. Sundareswaran, email The trend of crude prices is downward and there is bound to be a corresponding downward revision of prices of aviation fuel also. That should take care of the escalating cost operations to some extent. As in other sectors there should be also an effort to effect savings in all sections of the operations and reduction in number of flights when the occupancy is not to the optimum mark. Raising of fares should be the last choice. T. R. Anandan, email The Aviation Ministry should intervene and reduce ATF prices. On staff costing, key positions such as that of pilots and ground staff are inevitable costs. Maximum effort directed towards non-essential personnel costs at ground level needs to be pruned. Strategic alliance may be worked out to reap the benefits of large-scale operations. Avoid unhealthy competition as it can kill the industry in the long run. Ashok Jayaram, email More Stories on : Airlines | Economy | Sticklish Issues
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