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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... 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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... 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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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