Indian Aviation Industry

Prior to 2008 Indian aviation Industry registered astounding growth rates and grew by 23% YOY, it defied economic meltdown and when giants like Alitalia were struggling to pay their debts, Indian companies were growing by 7-8%. In the midst of this euphoria various private sector players jumped into the bandwagon using both equity and outright purchase of the airlines. Government tried to support this momentum and cleared several greenfield airports which includes impressive and operational airports like IGI at New Delhi, RGIA Hyderabad, Bangalore Airport. some smaller airports were also developed and Indian aviation was all set to fly. 

Fares were coming down, seat occupancy was going up, on certain sectors airlines were competing with backbone of Indian transport i.e. railways and were winning the battle. However in the midst of this fanfare no one realised that despite billion that were being pumped in, aviation infrastructure of the nation wasn't moving ahead. In fact on ground it never moved after 1980's and whatever growth was there, was just on papers. 

Gloom begin to surface after astonishing fake pilot licence scam surfaced and despite political pressure some pilots got punished and scot free and some never got caught, malaise was so deep that some "fake pilots" were flying for more than 15 years and were acting as commanders. 

Second problem which Industry realised very late was that of Air turbine fuel duty, which is a domain of state governments and Union government has no say on that issue. State governments behaved stubbornly or simply ignored the issue as old age politics considers Air travel a luxury, which led to ATF tax rate of as high as 50% , which not only hampered the growth rates but also affected the connectivity and dampened the process of developing ground infrastructure. 

Situation is so bad that in central India, there is no "Active" International airport in a radius of more 600 Km, and it was not until very recently that local government woke up and declared a half built airport an International Airport, from where even first International flight is yet to take off, despite having a population of more than 70 million. and it just case of one pocket, there are several such pockets in the country. This attitude has led to a situation where travelling within the country is more expensive than travelling overseas and in some cases travelling to USA or UK is cheaper compared to travelling within the country. 

Green field projects have only lead to cause more problems as unreasonable usage charges have only helped in increasing fares, in a price sensitive market. Similarly Government has failed to develop proper infrastructure for pilot trainings due to which airlines have to get expensive expat pilots, and in some cases even air hostesses too. Even navigational equipments are old and inefficient due to which flights have to spend more time in air, thus burning more fuel and according to some surveys done by AAI, it is possible to reduce this wastage by 10-15% if government invests in modern navigation equipments. 

India has also failed o develop its own version of regional jets, which despite contradictory reports will be cheaper and easier to maintain and will be able to cater Indian demands better. Unless some of these issues are catered at the earliest I don't find any reason as why Indian carriers will make a profit, they are already flying with more than 75% of occupancy. 

Hence now ball is in governments court and in my view it should 

Reduce ATF duties

provide Tax benefits to airline industry (If government can provide tax holidays to new industries then why not some support to save thousands of jobs, with potential of creating many more)

Limits airport usage charges

develop better feeder network for airports

Support crew training and maintain standards

rationalise its route policy

Else, be ready for days when only Air India will be flying that too won public money, because after Kingfisher now Jet Airways, India's largest private airline is also in red, and same is the case with entire industry including state owned Air India. 

Republic Day Parade: Showpiece of Diplomacy:

Mesmerising sight on 26^th January 2012 at Rajpath that wore the colours of valour, sacrifice and demonstrated the cultural heritage and the Idea we call India. Every passing moment not only made country proud but also demonstrated the success of India’s look east policy and India’s ability to forge strong relations in China’s backyard and through her gestures Prime Minister Shinawatra made it sure that she presents Thailand as a country that shares strong cultural values with India and that relation between two countries are not just about containing China.

If one is to view this development in the light of what president Obama said during his State of the Union address, it becomes clear that America is back in pacific and is ready to play a more active role compared to recent past and it is for India and pacific nations to take as much advantage of this opportunity as possible and India has been making sure that it utilizes this opportunity.

India has been able to sort out the only niggling issue of nuclear trade with Australia and has been steadily moving forward to start nuclear trade with Japan. In order to restore normalcy in North-East India has been able to bring democracy in Burma, thereby opportunity to connect this underdeveloped part of the country with Thailand and rest of the East Asian economy power houses and with a favourable government in Dhaka pace of normalisation in North-East has certainly increased.

Another point that worth notice is the fact that president Obama did mentioned that he won’t take any option off his table but if delve deeper into his address it won’t be hard to realise that he is not willing to go to war “alone” as he wish to build America with the money he will save from Afghanistan and Iraq wars as a result of pull out and provide a much needed relief to American economy and will take world along on this particular issue while at the same time indirectly warning Pakistan of raids like Abottabad.  

In recent times India didn’t shied away from displaying its affection for Afghanistan and invited 22 children to participate in Republic day parade and conveyed a terse message to Islamabad that irrespective of internal dynamics of Pakistan India won’t leave Afghanistan, thus providing giving a much needed relief to the Afghanistan government.

And as dusk sets in, India finds itself all set to shed its image of soft power and ready to fight for its right full place in world order and save and serve its best interests anywhere in the world. It marks the success of the diplomacy of a country which in past had struggled with and had failed to nurture relationships even with natural allies, but that is a past and for now India is all set to begin a new beginning and I see a country that is resurgent and is vibrant.