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