We need to think and dream big. And dreams, to be realised, must be combined with speedy execution accompanied by deep reforms. If China — which was just three and a half decades ago rated a poor country, in standards of living, per capita income, GDP and other parameters — can today be ahead of Europe, and within hair’s breadth of overtaking the US, militarily and economically, why not India ?

Let us trace our own recent trajectory with a particular focus on aviation.

Around four decades ago, we had two television channels, Doordarshan One and Doordarshan Two. There was a popular R.K. Laxman cartoon in those days. On channel one you had Indira Gandhi, and when you got bored and switched to the other channel, you had Sanjay Gandhi! We had only two car companies which made the Ambassador and Fiat Premier Padmini; two motorcycle and two scooter companies, Enfield India and Ideal Jawa, and Bajaj and Lambretta; one telephone company, Bharat Sanchar Nigam Ltd; and one airline, Indian Airlines and a bunch of crumbling public sector airports.

Thanks to the far-sighted reforms ushered in by P.V. Narasimha Rao, ably executed by Manmohan Singh, and carried forward during the Rajiv Gandhi and Atal Bihari Vajpayee era, and subsequent governments, we have now in excess of 500 television channels, more than 20 automobile and 15 two-wheeler manufacturers, an explosion of the cell-phone sector though now in danger of becoming a duopoly, a plethora of pharmaceutical companies; a pioneer and world leader in vaccine production, and a mighty nation in software and financial services, which is the envy of the rest of the world for innovation and low costs and struggling airline companies

The reforms that opened up the aviation sector in 1991, and ended the licence raj and monopoly of Indian Airlines and Air India changed the sector when a slew of private sector airlines were given the licence to fly; but only two, Jet Airways and Sahara survived, resulting in cartelisation. Again when the low cost airlines took wings in 2003, it broke the cost and the caste barrier to flying by penetrating deep into the rural hinterland. There was an implosion of demand that enabled the common people to fly, and along with it, the liberalisation of various other sectors propelled India into a vibrant, emerging economic power and a leader among developing economies.

Aviation’s recurring sickness

Sadly, while all the sectors have grown by leaps and bounds, Indian aviation have become ‘the sick man of India’. Thanks to choking regulations, tough entry barriers for new entrants, high fuel prices abetted by sky high taxes, inefficient public sector airports paving way for monopoly private sector airports that are extortionist in the absence of robust competition between airports, and in the absence of long term visionary strategic policy which is subject to frequent knee jerk changes, not just for airlines but for the gamut of the various sectors of aviation, growth of aviation has again slumped.

A HAL stall at the Aero India, airshow at Yelahanka Air Force Station, in Bengaluru

A HAL stall at the Aero India, airshow at Yelahanka Air Force Station, in Bengaluru

Our bilaterals, and open sky policies have to be rethought boldly and imaginatively so that Delhi , Bombay, Bangalore, Chennai and Calcutta airports can become mega transportation hubs like Dubai and Singapore. Emirates operates 118 Airbuses, 380 super jumbos the largest of any airline in the world. Dubai Hub has enabled that. India is strategically located to link West, Middle East to Asia and Far East. We should shed our inhibitions and diffidence in our thinking while framing policies.

The number of Indians who buy air tickets in a year is 140 million (which is 2019 figures before Covid ravaged the economy). They are not 140 million different individuals as it seems. That number comprises frequent flyers of 35 to 40 million who form bulk of the ticket buyers. It translates to less than 4 per cent of the population who can afford air travel, placing India in terms of per capita consumption of air tickets alongside some poorer African countries. Brazil, Malaysia, Indonesia and China are way ahead of India.

Hard numbers across the world from the pre-Covid year 2019 tells a different story. Ireland, not the biggest of economies, had sold28 million domestic air tickets to its 5 million people; Similarly, Europe (EU 27) sold 1,146 million tickets for its 447 million people; US sold 927 million tickets for its population of 325 million. Let’s leave the most developed economies. Take the case of Brazil which sold 119 million tickets for its population of 215 million; Likewise, Malaysia with a population of 33 million sold 63 million tickets; Indonesia’s 280 million people bought 116 million tickets, and China sold 660 million tickets to its 1.3 billion people in a year.

India with its 1.25 billion people has sold less than 140 million domestic tickets. Even Ethiopia sold 5 million tickets, with its 120 million people and Egypt with 100 million people had 4.6 million passengers.

New vibrant India

In 2002, after I founded the helicopter company in 1995, I saw a new vibrant India which had unleashed the consumer aspirations in the wake of the explosion of the reforms of Chinese economy. Explosion of TV channels that spurred the demand through ads unshackled the entrepreneurial ‘animal spirits’ long dormant in India. While on way to the US for an aviation conference in 2002, at Luton airport one of the five international airports serving London Metropolitan area, I saw an advertisement that screamed - it flew 13 million passengers per annum. It hit me like lightening. All the 40 airports in India flew as much then. On a flight of South West Airlines in Phoenix in Midwest US, a heavily tattooed burly man is shorts and bunions sat next to me with his family at the back. I learnt he was a carpenter visiting Grand Canyon. That was my moment of epiphany. I did not have to be a rocket scientist or seek McKinsey’s validation. I decided India was ready and launched a low cost airline on a prayer and a wing and hope and optimism, the invisible fuel of any economy.

It was a crazy idea but the atmosphere was conducive under the NDA government led by Vajpayee. Entrepreneurs broke the status quo, smash cartels and create new markets. So was it with Bill Gates, Steve Jobs and Narayan Murthy then, who founded Infosys with ten thousand rupees and so is it today with Byjus or PayTm. Naresh Goyal was a humble travel agent who cobbled together some funds and built a world class airline. Capital will eventually find the entrepreneurs who have revolutionary ideas, as the river courses it way to the sea. As we have seen, a mighty war chest need not guarantee success of a game changing venture.

The ‘Start Up’ campaign, is a laudable initiative by PM Narendra Modi but it is largely the driving force in hi-tech companies disrupting many conventional businesses. It must spread to other areas. Aviation is integral to equitable economic growth to be globally competitive and to harness large swathes of India struggling with poverty and unemployment. Passenger airlines and air cargo subsume geography and knit remote areas together that are alienated and drive investments deep into the bowels of the country and give them access to markets and boost tourism which is the largest employment generator in the unorganised sector.

With mega airports controlling air and ground space, it’s well nigh impossible to connect rural small regional towns from large metros stunting regional connectivity despise the commendable UDAN initiative. And where slots are available with difficulty, costs are prohibitive.

Reforms needed

Our air cargo growth is languishing and is almost zero. Hongkong airport alone handles more cargo than all our 100 airports put together. Aircargo integrated with road, rail and ports is the blood vessel of a growing economy. It is critical to understand that for passenger airlines to grow you need reforms in all areas of aviation - air cargo, airports, aviation fuel taxes— State and Central (which are the highest in world, which go upto 50 per cent) the MRO (Maintenance, Repair and Overhaul) which is in an utterly dismal state. The labyrinth of taxes, customs and other duties and tortuous rules to bring in parts, repair, overhaul, and re-export back or using it on our aircrafts is a deterrent. All airlines send their aircrafts for major MRO to Dubai, Singapore or Lufthansa Technic, where many Indian technicians are employed. Similarly, charter business has remained stagnant. It’s the breeding ground for pilots and engineers who feed the airlines. The irony is that we have around 4,000 pilots and thousands of technicians unemployed. Meanwhile, we have to import foreign pilots and engineers pushing up costs.


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And finally, our Air Craft Act and rules go back to 1934 and 1927 when helicopters and jet engines were not invented. Frequent modifications are issued but under theoverarching mother act, rules that are not keeping up with modern technology in aerospace, increases costs to the industry ultimately affect the passengers growth. The regulators are not popular in any country. But our DGCA cadre needs to be modernised, well staffed, motivated and incentivised. Just as the Atomic Energy Commission and ISRO is headed by scientists, the DGCA must also be helmed by aviation professional from among their ranks instead of the ubiquitous IAS bureaucrat who may have been heading an animal husbandry department earlier. All these need comprehensive overhauling and deep reforms.

Despite all the set backs and deterrents, there’s a silver lining. Whatever India may not possess, it has an inexhaustible market and a largely untapped potential. That gives hope. The only question that has to be asked by policy makers is, what should the government do to make common Indians fly? How do we take the present 4 per cent who are flying to 50 per cent in the next two decades.

That will show the roadmap to the future we all aspire.