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Wanted: a second airport for Chennai No mega rail project for Tamil Nadu All eyes on Sankara Nethralaya Towards speedy justice The Jan Dhan bonanza Padma Bhushan for A Ramakrishna Reliance’s TV – 18 ready to launch Tamil News Channel The brown list of Venkitaramanan Streamlining mandatory third party cover S V Raju – a ‘good’ true liberal An informal presentation - analytical, forward locking... For whom the bell tolls? Sweeter prospects for sugar Medical costs hit the roof... A welcome initiative by the judiciary Music happens Adapt Vajpayee dinner diplomacy Small units prefers to remain small... Revive development banks... Welcome focus on core competence Kulandai was a giant Poor quality of university VCs A think tank for Chennai Cutting the nose to spite the face The rise and rise of KCP More heat than light WTO Meet: resolved to meet again L&T- the specialty of special purpose vehicles Silver Years of Madras Musings Tatas moving out of urea production... Adharma of opposition politics Inflation: are we emulating Argentina and Brazil? Odisha: spectacular win by Naveen Patnaik The rise and fall of Annamalai University Remembering Indira Sivasailam... Muffled voices for merit… Fortune 500 review Tribute – Manikam Ramaswami PC’s preference for professionals Shaming of Tamils by Tamil farmers at Delhi Demise of a media baron... Modi storms Silicon Valley Delhi is distant… IPL type auction for VCs? Secularism and anti-Hinduism R Sridhar steps down as CEO of Shriram Capital Sweet news for TN sugar mills Where a state respects its litterateurs… Delhi returns to BJP This scant respect for Law GNS - 100: our first subscriber Rahman at CIC Kudos to NDTV... The ‘Jayanthi Tax.’ The Swadeshi Trump Auto components surge… Telangana in top gear… Make standards certification mandatory... 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For whom the MIDS bell tolls? …and of a popular trade leader More tributes to GR The balancing act Plummeting profits of PSBs GM Technology at last! The Ports’ Pasha expands into Tamil Nadu Airlines in India: cost and space Delhi Chalo... A more liberated TN… Poor representation for Kerala and TN in Cabinet F C Kohli - his concerns all embracing London, London Narayan Tihar, Puzhal not different from Parappana Agrahara No Maha Koottani in TN... EVM is tamper-proof Waning interest in public discussions… Noble nonagenarians... Come elections, come advertisements... Solar thermal shines… Multi-faceted Venkat A professional at the helm of IRDA... TIAM turns a full cycle Pharma – overdose of copying Welcome GST A Grand Finale for SN’s MS centenary at the US… Focus on quality of power - its only around 170-180V A glass full of corruption A C Muthiah – his munificent bequeaths to science Land reclamation from sea appears cheaper! Intellectual of rare qualities TN – agglomerate land holdings without alienating ownership Liberal imports idling indigenous capacities Of course, Gujarat is vibrant West Bengal: mindless malignancy IAS invades NDDB... Naidu’s return augurs well for Seemandhra Engineering seats go abegging S Ramanathan – a versatile musician, musicologist China invests in India When small is no larger beautiful.. CIPET hqrs to stay at Guindy – for the present? A rich pool of talent not utilised…. Cement prices continue to rise… Protest masters... Strengthen the base... Editor's Says Return to king coal for urea... A Grand Finale for SN’s MS centenary at the US… TN accounts for the largest recruits by the IT sector Bihar elections - the Rajaji formula worked Road development slows down CRS, a jewel among managers, is no more. TGS- The king storyteller Nuclear power at the nucleus Welcome thrust on trade in Modi’s foreign visits... Revving up the manufacturing sector Modi and the lady Sri Lanka votes for change No engine for this car Godspeed, Chief Minister JJ Bihar – Nitish Kumar adopts the Lalu model CII projects higher growth… More Shakthi to Das’ elbow Quality silica from Neyveli An inexplicable neglect Alexa – Talking Wikipedia Computation of GDP – conundrums continue Varuna (rain) in 2015; Vaayu (air) in 2016. Chennai devastated Not just in-laws (and outlaws); they’ve renowned academics at the helm! Diamond jubilee of Egmore Samskrt School Fuel for thought The few handicaps... Mu Sigma – is no more Polls and promises Building loyalty through the stomach Tough task taking states together Mersal magnified Limit foreign borrowings to hi-tech, export potential projects... Paytm karo... Discoms deserve better… 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 The star of Spencers is no more IPL - no surprise this scam A yen for wastage… Insurance companies bleeding, yet no decision on increasing FDI limit! Chennai and Kolkata miss opportunity to grow as Delhi and Mumbai The Gulf aviation boom There was flood of milk. Reason: no milk commissioner! B H Kothari - a tribute Infrastructure funding – lessons learnt TN-leverage strength of BHEL, NLC... Quality education through the PPP mode Roaring Ro-Ro facility A proud Madrasi Readers' Mail Dr C Rangarajan returns to Chennai Fortune for Indian Airlines Whistle-Stop Tour of Raghuram Rajan Colour-Chem’s colourful KRVS Build close rapport with business leaders
 
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.

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