A Bright Future

The government of India embarked on liberalisation of the Indian economy beginning in the early 1990s, a step that was expected to benefit the Indian civil aviation industry too by way of reforms in a number of critical areas essentially through the involvement of the private sector. This hitherto had been taboo in a command economy founded on socialist principles. However, for one reason or another, the civil aviation industry since then has been literally struggling for survival. The initial resurgence in the airline industry in the wake of the bold move by the government in the 1990s that led to the emergence of airlines in the private sector, soon petered out. A number of start-up full service carriers downed shutters after a few years as they were unable to sustain operations in the hostile business environment prevailing in the country, the so-called economic liberalisation notwithstanding. Only two of the newly launched full service carriers, i.e. Jet Airways and Air Sahara that had the support of financially powerful business houses, managed to sustain operations despite accumulating humongous losses. Air Sahara too perished a few years later.

The second resurgence in the airline industry began in 2003 with the entry of Air Deccan promoted by Captain G.R. Gopinath who ushered in the low-cost carrier concept that was characterised by no-frills service and fares affordable by the less affluent segments of society. Air Deccan was soon followed by the rise a number of other low-cost carriers, of which IndiGo Airlines, SpiceJet and GoAir continue to operate today. Some new entrants of the time such as Kingfisher Airlines that devoured Air Deccan and Paramount Airways could not survive in all likelihood, on account of their flawed business models. As of now, the surviving private carriers from those born during the second resurgence, continue to operate; but burdened with heavy cumulative losses, are in distress. Perhaps the only exception is IndiGo Airlines.

The third resurgence in the Indian airline industry now underway has generated new hope for the industry especially with the entry of new carriers such as AirAsia India and Vistara, both as joint ventures between the house of the Tatas and Singapore Airlines, entrepreneurs of impeccable credentials and formidable reputation. This has been possible only due to the refreshing change in policy in the recent past wherein foreign carriers are now permitted to pick up stake in Indian carriers, something that was not permitted so far despite the reforms. The financially ailing Indian carriers are now seeking to join hands with foreign carriers, one such being the Jet-Etihad deal. Other carriers such as SpiceJet are seeking similar lifeline. Another start-up, the Vijayawada-based regional airline Air Costa, has successfully completed 12 months of operation and fired with optimism about its future prospects in the industry, is drawing up plans for massive expansion and upgrade to the status of national carrier.

As for the business and general aviation segment of the Indian civil aviation industry, it has undoubtedly been the most neglected. However, there are some encouraging steps in the offing. One of the proposals put forth by the Business Aircraft Owners’ Association (BAOA) for consideration by the Ministry of Civil Aviation (MoCA) is to enhance the involvement of non-scheduled aircraft operators in the effort to expand regional connectivity to un-served and under-served destinations. The BAOA has specifically asked the MoCA also to include helicopters in the fleet of commuter airlines as rotary- wing aircraft would be able to provide connectivity to areas that are remote and are not accessible particularly in Jammu and Kashmir, the North East region, Andaman and Nicobar Islands as well as Lakshadweep. Fixed-wing aircraft are unable to cover these regions adequately due to non-availability of runways, a limitation that does not affect helicopters that do not require elaborate infrastructure to operate from.

The government is also planning to permit non-scheduled operators to publish schedules and operate flights as a scheduled commuter airline, provided they operate amongst the smaller cities and towns 87 of which have been identified by the MoCA. This step will not only boost regional aviation significantly enhancing passenger traffic to ultimately benefit the regular carriers, but would also help the commuter airlines to grow rapidly. The Directorate General of Civil Aviation (DGCA) is also in the process of drafting a comprehensive policy for the Business and General Aviation which may substantially reduce the time required for issue of licence to a prospective non-scheduled operator. Meanwhile, the government is moving forward decisively to replace the DGCA with an autonomous and empowered Civil Aviation Authority.

There is now hope that with a dynamic and visionary government at the Centre, the Indian civil aviation industry will finally emerge from stagnation.