PROPOSAL FOR RATIONALIZATION OF OPERATIONS OF DOMESTIC AND INTERNATIONAL FLIGHTS BY INDIAN CARRIERS.

Background :

We are all aware that the Indian Aviation Sector was open for almost 40 years since Independence only to Public Sector Undertakings of Indian Airlines and Air India, for commercial operations of carrying cargo and passengers to various destinations within the country and also some destinations abroad. Around 1990, the “open to sky” policy was adopted by Govt. of India in the Civil Aviation Sector to promote privatization of such operations and accordingly about a dozen or more airline companies started operations within India. Many of them died a natural death because of stiff competition amongst themselves and Indian Airlines as well. Although now for the last 15 years or so, only a few companies have continued their operations and a couple of new ones have emerged on the scene, the commercial operations of these airline companies are not on a steady and sound financial footing for the last five years, because of prevailing Govt. policies, taxation, duties, levies, different user charges and last but not the least – price sensitivity of the aviation turbine fuel required to fly their craft. Any upheaval in the aviation turbine fuel cost in the international market has a substantial impact on profitability of the operations of airline companies and the Govt. run IA and AI are no exception to such trends. There is a substantial competition from even our own Indian Railways - particularly in respect of people traveling by AC chair car, AC 3 tier, AC 2 tier and A.C. first class to the low cost carriers.

Too many airline companies with too many air planes are choosing too few passengers. This has resulted adversely in reduced load factor or occupancy factor on flights between various destinations. In order to increase the load factor all kinds of marketing gimmicks are applied by these airline companies. Hefty discounts are offered to air passengers to attract them. These actions lead to unhealthy practices. At times, to cut corners, facilities provided to passengers are reduced or staff including crucial ones such as pilots, is reduced, leading again to over worked pilots with little rest or sleep. This puts the lives of the passengers to greater risks and compromises safety.

In order to break this vicious circle, a proposal is hereby made for consideration of all concerned, to give it a serious thought and make drastic changes in the present policies to make the aviation sector in India, profitable, equitable, affordable and safe for all concerned. If this suggestion is taken in the right spirit, it will not only ensure profitability and a level playing field for a limited no. of airline companies but will also ensure that the Indian flag carrier soars in the sky with renewed confidence and glorious operations. This has become particularly necessary in the present times because airlines are curtailing the flight frequency, reducing staff strength and suffering heavy losses in international operations.

PROPOSAL :

1. There should be no more than 5 airline companies operating in India.

2. Out of these 5, one will be the national carrier which will fly to international destinations from various domestic airports and this international carrier will be a Company formed through a joint venture of the other 4 companies and the State run Indian Airlines / Air India.

3. These four airline companies could be formed by any method currently available such as merger, take over, joint venture, consortium etc. and each one will have a base station for its operation.

4. These base stations will be at Delhi, Mumbai, Kolkata and Bangalore airports.

5. Every three years, the base station allotted to these four companies will shift in a clock-wise direction to the next airport with a view to break monopoly of flying certain routes.

6. These companies will operate in the following manner :

i) The company stationed at Bangalore can fly to other three base stations and the companies stationed at other 3 destinations can also fly to the remaining 3 destinations. Over and above this, all domestic flights to Southern sector in India will be operated only by the Company, stationed at Bangalore.

ii) Similarly, the company having its base station in Kolkata can operate only to various destinations of Eastern India and North-Eastern India.

iii) In other words, a person flying between Bangalore and Delhi can have only two choices of airline companies – either the one operating from Delhi or Bangalore only. He will not have a choice to fly on this route in an aircraft of the company operating from Kolkata.

iv) Thus, the company having its base station in Kolkata, cannot fly between Bombay and Rajasthan in the Western Sector.

v) In this fashion, the movement of people across the airlines will be streamlined and each of the aircraft flying to smaller cities within a sector, will have full load of passengers assembled at the base station from various destinations.

7. In short, a person in Cochin cannot have a direct flight to Kolkata, he has to have a stop over at Bangalore, i.e. the base station of the Southern Zone. Furthermore, if he wishes to fly to Guwahati, i.e. the North Eastern sector since there will not be a direct flight from Bangalore to Guwahati, he will have to transit at Kolkata and change the airline and proceed to Guwahati. Such an approach will also ensure excellent load factor for flights between these four base stations, thereby increasing the profitability of these airline companies.

8. Profit earned out of these operations – which are very rational – should be pooled in by these companies along with the stakes of the Govt. run companies like the Indian Airlines and Air India to run the show of international flight operations from any of the base station airports in India.

9. Such a system of operations will also ensure proper scheduling of time of flights and avoid unnecessary bunching of flights in the peak hours.

10. Another benefit of such a system lies in the business generated at various airports in terms of providing facilities to the transit passengers.

11. So also, every airline will be socially committed to run operations to smaller cities from its hub and it can meet its obligations and also earn profit since no other airline will be allowed to operate in that sector.

12. In short, a complete re-vamping of the policy of commercial operations in the domestic and international sectors is called for, to create a win-win situation for all stake holders including our countrymen, who are prospective clients of the Companies.

Sooner this policy change is effected, the better.

(M D LELE)