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Fortress India

Omkar Goswami


Let’s take a trip down memory lane to 1991. Those were the glorious days of true saffron swadeshi — when there was only one domestic airline, and the colour of its fuselage was orange. Remember the unexplained ‘technical’ delays? The rude ground staff? The long check in lines? The limited number of flights? The awful food? The fact that the non-vegetarian option always ran out by the time the stewardesses reached the middle of the A-300 Airbus? The enormous time that it took for the baggage to arrive? The penalties that one paid for postponing (but not advancing) one’s flight? The strikes by engineers, pilots, cabin crew, baggage handlers at the drop of a hat? The dirty planes? And the tyranny on the netas and senior babus who could delay flights at whim?


Its changed, right? Indian Airlines has a much improved on-time record; its staff are more courteous; the high and mighty pilots now tell us about routes, ground speed and head wind; the food is far more edible; stewardesses smile more often than not; baggage comes out faster; the awards on mileage are better. Most importantly, there are literally scores of flights between Delhi and Mumbai, and any one of us can arrive at the airport and purchase a ticket within ten minutes. Who is the winner? The Indian consumer.


There are only two proper nouns and one common noun that can explain the change: ‘Jet’, ‘Sahara’ and ‘competition’. Competition explains the real operational turnaround of Indian Airlines. And the lack of it explains why the Indian international traveller is being taken for a ride and why, despite all the protection, Air India is well and truly doomed.


Try taking a flight out of India — especially one going eastward — at a very short notice. In peak season, you will most certainly not get a seat in business class. And at other times, you will have to count your lucky stars. Why is this so, when there is no problem whatsoever to fly at an hour’s notice between any of the Indian metros?


The reason has everything to do with our absurd adherence to bilateralism in civil aviation, and with the Ministry of Civil Aviation’s long-held myopic belief that the value of Air India needs to be protected. Bilateralism is simply this: the decision on whether there should be more Lufthansa flights to Bangalore depends upon the bilateral negotiations between our Ministry of Civil Aviation and the German counterpart.


By itself, there may be nothing wrong with a bilateral approach, although it should be  obvious that a multilateral open sky policy is definitely better from the point of view of consumers. Bilateralism, however, becomes particularly awful in the Indian context.


Everybody knows that in India there is a huge excess demand for international travel — business and tourism alike. Therefore, businessmen and tourists coming to, and departing from, India can only be better off with more international flights. This is where our Indian twist to bilateralism comes in. British Airways, Singapore Airlines, Lufthansa, Emirates and others want to operate more flights in and out of India. And to do so, the aviation authorities of the countries that officially negotiate for these airlines would be happy to offer equivalent number of additional flights to Air India. However, as we all know, Air India just doesn’t have enough planes to take advantage of this one-for-one reciprocity. So, the Ministry of Civil Aviation doesn’t allow most of these extra flights by the foreign airlines. And who gets stiffed in the bargain? Yes, you got it — its you and me, and others like us.


The argument for this “beggar myself, so beggar everybody” approach is even more bizarre. Since Air India doesn’t have enough aircrafts and since it constantly racks up losses, it cannot take commercial advantage of bilateral reciprocity. True enough. Now comes the Orwellian twist. According to successive civil aviation ministers and mandarins alike, unilaterally giving additional flights to international airlines will reduce the value of Air India, and thus affect its price in any privatisation programme.


I have rarely heard such blatantly monopolistic, anti-consumer cock and bull repeated as frequently as this one. If Air India doesn’t have enough capacity, then it can hardly be expected to service the extra unmet demand. Either it should purchase get new  aircrafts to augment the capacity, operate them efficiently, meet the additional demand, and turn in higher profits, as does Singapore Airlines; or it should recognise that, for all its self-importance, it is a marginalized bit player, and that extras in the airline business are valued as poorly as extras in films. In the meanwhile, Air India’s valuation continues to fall, while business travellers and tourists coming to and departing from India are bereft of enough seats. This is Fortress India: few can come in or get out because the gatekeeper wants to protect his rapidly eroding monopoly value.


The solution is simple and two-fold. First, privatise Air India at whatever value the government can get. And second, have a more proactive Ministry of Civil Aviation that cares more for consumers than protecting its turf and free First Class upgrades. There is absolutely no reason why India shouldn’t have at least ten to fifteen more international flights flying east and west. That will begin the much needed revolution in international travel, and give substance to a meaningful tourism policy.          


Published: Business World, August 2003


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