Ad Here  
Revive development banks... Why this malaise in medical education? When small is no larger beautiful.. Cement prices continue to rise… Marketing expert Balagopal is no more Air Asia India will set new benchmarks for budget travel Telangana in top gear… WTO Meet: resolved to meet again The why of tax incentives The sea- saw battle continues... Editor's Says Dr C Rangarajan returns to Chennai Boy, can you beat these? Welcome focus on core competence CSR and CMI: promise of another Srinivasan Ramanujan... Streamlining mandatory third party cover Whistle-Stop Tour of Raghuram Rajan Five star activism stalls development activity Reliance’s TV – 18 ready to launch Tamil News Channel Colour-Chem’s colourful KRVS Tribute – Manikam Ramaswami Tribute More tributes to GR A friendly business group Focus on quality of power - its only around 170-180V Where a state respects its litterateurs… A yen for wastage… Building loyalty through the stomach Towards speedy justice S V Raju – a ‘good’ true liberal The Ports’ Pasha expands into Tamil Nadu Parliament in paralysis... Breaththrough in malaria control Medical costs hit the roof... Demise of a media baron... Naidu’s return augurs well for Seemandhra B H Kothari - a tribute London, London Narayan More Shakti to resource mobilisation... Godspeed, Chief Minister JJ Sri Lanka votes for change A professional at the helm of IRDA... A proud Madrasi Chennai and Kolkata miss opportunity to grow as Delhi and Mumbai Things happen by accident and not by design... Excel Generators provide the vital back-up Return to king coal for urea... Limit foreign borrowings to hi-tech, export potential projects... A think tank for Chennai TIAM turns a full cycle CRS, a jewel among managers, is no more. When the President was rendered homeless… SoA @ 80 IAS invades NDDB... PPP mode for upgrading Corporation Hospitals A C Muthiah – his munificent bequeaths to science The Swadeshi Trump TELANGANA at last…BUT The Jan Dhan bonanza Come elections, come advertisements... Fortune for Indian Airlines Odisha: spectacular win by Naveen Patnaik Inflation: are we emulating Argentina and Brazil? A Grand Finale for SN’s MS centenary at the US… Wise Presidents CII projects higher growth… The Gulf aviation boom How Air-India loses customs... Adapt Vajpayee dinner diplomacy Robber barons everywhere Padma Bhushan for A Ramakrishna More Shakthi to Das’ elbow Russi Mody – a tribute Rs.1600 crore paper board plant of TNPL Of course, Gujarat is vibrant Another Indian music maestro at the UN F C Kohli - his concerns all embracing Where is Rajaji? When Ratan Tata visited SRM An enemy’s enemy is a friend Delhi is distant Solar, solar everywhere … Scientists urged to take up farmer-oriented research Like Hinduism: many paths to reach God... Tihar, Puzhal not different from Parappana Agrahara Welcome GST No engine for this car EVM is tamper-proof Solar thermal shines… Discoms deserve better… The star of Spencers is no more Bihar – Nitish Kumar adopts the Lalu model The brown list of Venkitaramanan Fall in crude prices help in oil sector reform Fuel for thought Gay abandon in pricing Road development slows down Cutting the nose to spite the face Tribute – M V Murugappan Kulandai was a giant Mersal magnified When online building permits work…. Small units prefers to remain small... For whom the bell tolls? Editor's Notes Liberal imports idling indigenous capacities …and of a popular trade leader All eyes on Sankara Nethralaya Vibrant Gujarat This scant respect for Law Engineering seats go abegging Put expensive assets created to use... Alexa – Talking Wikipedia Nuclear power at the nucleus More heat than light The ‘Jayanthi Tax.’ Recognition to role of NBFCs.... TGS- The king storyteller Muffled voices for merit… CIPET hqrs to stay at Guindy – for the present? IPL type auction for VCs? The balancing act Shanti and Sadhana through Music Polls and promises Music happens Haul over the coal Online not in line with brick and mortar businesses... TN accounts for the largest recruits by the IT sector ONGC at KG Basin PC’s preference for professionals A glass full of corruption An inexplicable neglect Kinetic Karnataka Modi and the lady When TN politicians can emulate Kerala's Align crops to agro climate endowments… Airlines in India: cost and space to the lack of interest on the part of these to focus on original research. This despite the much lower costs of such research in India. The industry which thrived on the protection of a closed economy and the advantage of a vast domestic market, has failed to organise its evolution on healthy lines Eternal support for capitalisation of PS banks Fortune 500 review Protest masters... Sweet news for TN sugar mills There was flood of milk. Reason: no milk commissioner! Land reclamation from sea appears cheaper! Shipping woes of Chennai companies The nuclear option For whom the MIDS bell tolls? Making ‘my Amaravati’... Delhi returns to BJP West Bengal: mindless malignancy Silver Years of Madras Musings Varuna (rain) in 2015; Vaayu (air) in 2016. Chennai devastated Banning booze... TN-leverage strength of BHEL, NLC... Bihar elections - the Rajaji formula worked TN – agglomerate land holdings without alienating ownership Pharma – overdose of copying No mega rail project for Tamil Nadu Permanent secretariat for TN GIM Quality education through the PPP mode Tatas moving out of urea production... Paytm karo... Revving up the manufacturing sector Why land prices zoom in TN? Quality silica from Neyveli Should we change the official year? China invests in India MHC should not return to its old indisciplined ways Moily’s bold thrust Remembering Indira Sivasailam... L&T: focus on infrastructure and more infrastructure… Welcome thrust on trade in Modi’s foreign visits... Tatas moving out of urea production... L&T- the specialty of special purpose vehicles Waning interest in public discussions… Intellectual of rare qualities Computation of GDP – conundrums continue Contrarian cousins A rich pool of talent not utilised…. Roaring Ro-Ro facility Valli, they are more marginalised Lesson from Chandrababu Naidu Measuring roof tops in terms of KW/MW Strengthen the base... Tax agriculture A welcome initiative by the judiciary Naidu will soon build a new Hyderabad Insurance companies bleeding, yet no decision on increasing FDI limit! The rise and fall of Annamalai University GNS - 100: our first subscriber Funding the un-funded Maximising the micro pricing … Delhi is distant… Plummeting profits of PSBs No Maha Koottani in TN... Mu Sigma – is no more R Sridhar steps down as CEO of Shriram Capital Poor representation for Kerala and TN in Cabinet Readers' Mail Diamond jubilee of Egmore Samskrt School Tribute – UCAL Selvan… IPL - no surprise this scam He saved millions from starvation... Infrastructure funding – lessons learnt Welcome changes that testify to Jayalalithaa’s return to health GM Technology at last! Modi storms Silicon Valley New IT products of Ramco in the pipeline… When nations steal growth from one another… A Grand Finale for SN’s MS centenary at the US… Make standards certification mandatory... Noble nonagenarians... A more liberated TN… Delhi Chalo... Shaming of Tamils by Tamil farmers at Delhi Increasing non co-operation of state leaders Shale gas and its shallow future Cleaning Ganga – relocate tanneries and install electric crematoria Kudos to NDTV... Don’t seem to feel the pulse… The few handicaps... Rahman at CIC The power-full Hindujas Sweeter prospects for sugar Not just in-laws (and outlaws); they’ve renowned academics at the helm! Auto components surge… Secularism and anti-Hinduism Wanted: a second airport for Chennai The rise and rise of KCP S Ramanathan – a versatile musician, musicologist Tough task taking states together Multi-faceted Venkat Convulsions in The Hindu Build close rapport with business leaders EEC at the National Media Centre Preserving for the future Poor quality of university VCs Gas is the way forward He continues the focus on social amelioration Which side are you, Montek? An informal presentation - analytical, forward locking... The ‘Ayyo-yes’ is no more Lalu’s envy, India’s pride Adharma of opposition politics
Fortune for Indian Airlines

In the 1950s and 1960s, several countries in Asia and Africa were gaining independence. The first things these countries did were  (a)  invent a flag (b) decide on a national anthem and (c) establish a national airline. But setting an airline and efficiently managing it required both resources and management skills.

The Gulf countries witnessed a huge surge in their incomes post the 1971 oil crisis. Most of these countries are small with little natural resources, except oil. With their sparse population, managing big business was an additional problem. With the oil prices zooming, several of these thought the civil aviation sector, employing manpower from across the globe, can be a lucrative business. Several oil-rich countries set up their airlines in quick succession.

Saudi Arabia, the largest producer of oil and Kuwait were among the earliest. In subsequent years, one witnessed several airline companies established in the Gulf region – Emirates, Gulf Air, Etihad Airlines... These countries also built modern airports. Dubai emerged among the largest of these and competed with the likes of Singapore and Hong Kong. The Gulf airlines, buoyed by oil wealth, went for a large fleet of modern aircraft. Emirates was one of the earliest to go for Airbus 380 aircraft, the largest in operation.

The location of the Gulf, en route to Europe and the US, was a significant advantage. Airlines in the Gulf attracted customers from India, used their home base as their hubs and offered non-stop flights to Europe, the US and other far off places and compete with the established airlines in Europe. In this, they found the large Indian air travel population an extremely attractive target for custom. The sloppy performance of India’s cash-starved national carrier Air India coincided with the surge in air travel from India, and these became great opportunities for the Gulf carriers. Through hubs like Dubai, Abu Dhabi, and Doha, these Gulf airlines offered convenient and often shorter duration flights to the US. Etihad Airlines went one step further in establishing the US immigration and customs department at Abu Dhabi. This helps complete formalities of immigration and customs in the transit time and enable passengers to arrive at US airports as domestic travellers.

The traditional hubs in Europe, Frankfurt for Lufthansa, Heathrow for British Airways or Charles de Gaulle for Air France, have been rapidly losing custom to these airports in the Gulf. These Gulf airlines also offer airfares at extremely competitive rates. Thus, the boom enjoyed earlier by the European airlines has substantially declined giving space to these airlines from the Gulf.

In India, a corresponding change is not taking place at an equal pace. Air India continues to operate international flights from the Mumbai and Delhi hubs. This means passengers from other cities are aggregated in these two hubs. For long, there has been a demand for Air India offering direct flights from the south, but it has not taken place. Two decades ago, Lufthansa started offering direct flights from Chennai, then extended these from Bengaluru and Hyderabad to Frankfurt and then to dozens of destinations in America, Europe, Africa and elsewhere. Private airlines like Jet Airways and later Kingfisher held promise of expanding its destinations to Europe, the US and other places. Again these were constrained by their resources needed for large-scale acquisition of aircraft and for maintaining and improving the services. Kingfisher crashed out.

Jet Airways joined hands with Etihad as an equity partner and has been able to increase its custom for foreign travel. IndiGo and SpiceJet thrive on local custom.  Tatas entered with a lot of promise, simultaneously setting up two airlines – one a joint venture collaboration with Singapore Airlines and the other with the budget airline AirAsia of Malaysia. These are in the process of getting licenses to fly abroad after the recent amendment to the 5/20 rule, which stipulated a minimum of five years’ experience in operation and at least 20 aircrafts.

Indian companies need much larger resources to benefit from the massive increase in the number of air travellers.

The new aviation policy provides exciting prospects to trigger entry of more operators in the Indian aviation sector.

Author :
Reported On :
Sector :
Shoulder :
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
S-15, Industrial Estate,
Chennai - 600 032.
PHONE: +91 44 22501236