Airline worries

The recent report by CAPA India projecting combined losses of up to $1.9 billion by Indian air carriers is alarming. This comes at a time when the industry is already crippled with various internal challenges including surging oil prices and the competition between low-cost carriers (LCC) and full service carriers (FSCs) in the Indian market.

CAPA, as per its report, has rightly said that cheap tickets for an hour’s flight has made FSC a redundant model as compared to LCCs operating in India. The ticket prices have not taken a backseat despite high cost/seat, but will bring no cheer in the long run. The airline industry needs to wake up to the current scenario and adopt innovative measures quickly to overcome such losses. It also not surprising to know that most carriers are ill-equipped to withstand cyclical downturns. As in past the market has seen the closure of several LCC airlines in the past like Paramount Airways. The government too seems to be concerned with this alarming report, as it is yet to find a stakeholder for the proposed sale of Air India stake of up to 76 per cent, despite amending its existing bid. This will further delay the process of stake sale owing to the gloom being witnessed in the Indian skies.

Hence the need of the hour is to optimise the right channels to ensure the viability of carriers. The only possibility seems to be to review the working model of FSCs and trim non-essential services like FFP and find innovative ways to keep the funding available throughout the operations life cycle. The airlines may also find ways to run on bio-fuel as experimented by Spice Jet, to keep the costs under control. On the other hand airlines cannot always look to the government every time problems crop up.

Bengaluru

With reference to “Motor Vehicles Bill favours big firms” (September 4), looked at from the need for the safety of the citizens, The Motor Vehicles (Amendment) Bill 2017 is not as retrograde as made out in the article.

Its provisions pertaining to civic agencies’ accountability for faulty design, construction or poor maintenance of roads leading to accidents; driving by juveniles and drunkards; removal of intermediaries and protection of Samaritans helping the victims are path breaking.

Making third party insurance compulsory will also benefit the victims. Of the various objections raised in the article, those pertaining to purchases from branded companies are noteworthy.

Pune

The government must be feeling helpless in an election year, as fuel prices are touching record highs and are expected to climb further. The damage was wrought when the government persisted with prices at the pump adjusted to peak oil prices, even after crude had hit the low $30-40 band. To make matters worse, the government added one cess after another, on an already high consumer price base.

An opportunity was lost to reduce prices then, particularly diesel, to bring down transportation costs and achieve an overall easing of consumer price regime.

The resulting drop in inflation indices would have enabled the RBI much earlier to cut policy rates.

Caught in a price trap, a falling rupee has only added to the woes. An economy, freed of unimaginative and casual taxation, would earn lot more revenue through buoyant growth.

Navi Mumbai

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