Time To Take Off
The aviation sector in India has never had a smooth flight. It has experienced air pockets ever so often, and most take-offs have been bumpy and landings rough. Yet for the media, as for many of the moguls who own airlines or those who once-upon-a-time did, the airline industry is a fascinating subject. Almost like the dream machine called Bollywood movies, which every starry-eyed industrialist has tried to hop onto and then burnt his fingers.
Aviation in India has always been a fascinating study because of its constant evolution, and the enormous risks involved. Somebody new is always coming in, and some crashing out. There was a time when the pink papers had dedicated Railway correspondents purely based on the size of Indian Railways’ operations and the number of lives it touched. But after these correspondents retired or jumped jobs in the 1990s, their posts were never renewed. Editors instead turned their focus to the more glamorous aviation sector.
There was a reason. There was much to report. After the ‘open skies policy’ was announced in 1991 a few private players stepped in to challenge the stodgy Indian Airlines. Among the first were East-West Airlines and Damania Airways, names that nobody remembers today. East West started with 3 aircraft in 1991 while Damania Airways launched in 1993 and made waves for its good-looking hostesses, and its pioneering move of serving alcohol on flights. Both were grounded very soon. East West Airlines, whose ownership was always a mystery, shut down in 1996 after its MD Thakiyudeen Wahid was killed in a hail of bullets outside his Mumbai office. Damania Airways, on the other hand, had problems handling debt and sozzled passengers who demanded and drank liquor on 6 a.m. flights. Parvez and Vispi Damania, the two initial promoters, shut the airline in 1997.
It was all part of evolution. The passengers became more mature and behaved better; the airlines too developed long-term vision. But the number of failures kept growing. In the next wave came Air Deccan and Captain Gopinath and, of course, the Greek tragedy — Kingfisher Airlines. But over more than two decades of private aviation, things have evolved. InterGlobe Enterprises’ IndiGo has made a mark with on-time services even if it has taller passengers sitting knock-kneed as the airline squeezes in more efficiency with that extra row in its aircraft. The Wadias’ GoAir has run small, but profitable services and even Air India is promising to turn in a small operating profit this year.
For various reasons, airlines have faced a hostile business environment. Yet aviation has grown with Indian carriers ferrying 18.55 million passengers during the first quarter of 2015 compared to 15.38 million passengers in the previous year. Compared to India’s travel needs, the current $16 billion market – the 9th largest in the world – is still small. It has the potential of becoming the largest by 2030, if the operators and the government get it right.
Today, the airlines are optimistic having reworked their business models after learning from past mistakes. They are straining to take-off and do well. However, the sector is still bleeding. Its combined losses for the last fiscal exceeds Rs 7,500 crore. Civil aviation minister Ashok Gajapati Raju, who spoke at length to BW, wants to lessen regulation and drop restraining norms like the 5/20 rule — 5 years of flying and 20 aircraft before an airline can fly international. He is also optimistic that the new civil aviation policy will be launched soon. Will the airlines finally have a good ride and make money? Read about it in our well-researched story put together by senior associate editor C.H. Unnikrishnan, associate editor Joe C. Mathew and senior editor Ashish Sinha.
This issue also explores the worrisome trend of falling exports — analysed by associate editor Joe C. Mathew — and peeks into the spanking Japanese townships in Neemrana and other centres around the National Capital Region. These and other stories promise to give you an interesting read.
(This story was published in BW | Businessworld Issue Dated 27-07-2015)
