Upthrust for aviation

By Shubha Madhukar
08 January 2005

The aviation fraternity is in a buoyant mood. The ministry is looking at vast spends in aviation infrastructure, private airliners are hiring resources: human and aircraft, aeronautical firms are happily making frequent trips to the Rajiv Gandhi Bhawan, where the ministry of civil aviation is located - expecting brisk business and Indian air travellers are beginning to expect world-class travel services.

Two recent decisions explain the upbeat mood. First is the government's decision to allow private airlines to ply on international routes. Airlines with a fleet strength of at least 20 aircraft with five years of flying experience can now fly overseas. Currently, all domestic airlines are allowed to fly only to the SAARC countries, a facility granted recently.

Second, the final go ahead from the cabinet committee on infrastructure headed by prime minister Manmohan Singh, for the modernisation of all 80 airports in the country. The modernisation process would involve an estimated expenditure of Rs40,000 crore, and bring spin-off benefits to several sectors ranging from tourism to infrastructure related manufacturing activities.

Private airlines on international routes
The five-year experience clause for private domestic airlines effectively includes only Jet Airways and Air Sahara. That leaves the ambitious upstart Air Deccan and the promising Kingfisher out in the cold.

The Gulf region has been reserved for state-run carriers Air India and Indian Airlines for the next three years, shutting out Jet and Sahara from the region. This is because these government carriers make their profits mainly from these routes.

Barring this caveat for the Gulf region, private domestic airlines can now have the freedom to choose the frequency of their flights and would have vast avenues as Air India's fleet inadequacy forced India to utilise only 20 per cent of its bilateral landing rights with over100 countries. Foreign airlines capitalised on this internal inadequacy of India's national carrier, which allowed foreign airlines to use its unutilised quota for a premium.