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Wise Presidents The rise and rise of KCP Should we change the official year? Shale gas and its shallow future The Gulf aviation boom Varuna (rain) in 2015; Vaayu (air) in 2016. Chennai devastated Making ‘my Amaravati’... Adharma of opposition politics Computation of GDP – conundrums continue Robber barons everywhere 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 Demise of a media baron... Why land prices zoom in TN? A think tank for Chennai A Grand Finale for SN’s MS centenary at the US… The Swadeshi Trump The power-full Hindujas Cement prices continue to rise… All eyes on Sankara Nethralaya Tatas moving out of urea production... This scant respect for Law CRS, a jewel among managers, is no more. Fortune 500 review Chennai and Kolkata miss opportunity to grow as Delhi and Mumbai A Grand Finale for SN’s MS centenary at the US… Alexa – Talking Wikipedia Revving up the manufacturing sector GM Technology at last! Why this malaise in medical education? F C Kohli - his concerns all embracing Welcome changes that testify to Jayalalithaa’s return to health A welcome initiative by the judiciary Parliament in paralysis... Like Hinduism: many paths to reach God... The nuclear option Delhi returns to BJP Permanent secretariat for TN GIM L&T- the specialty of special purpose vehicles Kudos to NDTV... A friendly business group Build close rapport with business leaders Nuclear power at the nucleus Welcome thrust on trade in Modi’s foreign visits... Don’t seem to feel the pulse… IPL type auction for VCs? 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Sweeter prospects for sugar Limit foreign borrowings to hi-tech, export potential projects... Fuel for thought L&T: focus on infrastructure and more infrastructure… Auto components surge… For whom the bell tolls? When online building permits work…. TELANGANA at last…BUT Shipping woes of Chennai companies GNS - 100: our first subscriber The ‘Jayanthi Tax.’ Medical costs hit the roof... Land reclamation from sea appears cheaper! The why of tax incentives Naidu’s return augurs well for Seemandhra Tribute – M V Murugappan Diamond jubilee of Egmore Samskrt School Inflation: are we emulating Argentina and Brazil? No mega rail project for Tamil Nadu Sri Lanka votes for change Lalu’s envy, India’s pride Odisha: spectacular win by Naveen Patnaik When TN politicians can emulate Kerala's An enemy’s enemy is a friend EEC at the National Media Centre Marketing expert Balagopal is no more A proud Madrasi An informal presentation - analytical, forward locking... TIAM turns a full cycle Haul over the coal When small is no larger beautiful.. Tribute When nations steal growth from one another… Preserving for the future Plummeting profits of PSBs Recognition to role of NBFCs.... Infrastructure funding – lessons learnt Funding the un-funded Road development slows down Which side are you, Montek? No engine for this car Convulsions in The Hindu Where is Rajaji? Tatas moving out of urea production... Five star activism stalls development activity PC’s preference for professionals Modi storms Silicon Valley WTO Meet: resolved to meet again Muffled voices for merit… The sea- saw battle continues... Bihar – Nitish Kumar adopts the Lalu model A professional at the helm of IRDA... The brown list of Venkitaramanan Solar, solar everywhere … Music happens Waning interest in public discussions… The star of Spencers is no more Mu Sigma – is no more Polls and promises Rs.1600 crore paper board plant of TNPL Engineering seats go abegging Streamlining mandatory third party cover How Air-India loses customs... Vibrant Gujarat The Ports’ Pasha expands into Tamil Nadu Excel Generators provide the vital back-up More tributes to GR A glass full of corruption
 
How Air-India loses customs...

I have in the past mentioned the failure of the national carrier Air-India to derive the maximum benefit out of the boom in air travel. Post the 1990s the massive increase in traffic was initially grabbed by the European giants like Lufthansa and British Airways. Surprisingly, despite bulk of this traffic moving towards the US, large American airline companies have not tapped this business. They have been content to leave the huge potential to be exploited by their partners in the airline alliances like Star Alliance.

After 2000, synchronising with the improvement in technology to fly over long distances with bigger aircraft, countries in the Gulf region focused on the airline business. These countries created productive infrastructure on the ground and invested massively in sophisticated aircraft.  With vast areas of land available in these desert kingdoms, in quick time sophisticated ground facilities were created. In quick succession Emirates, based in Dubai, Etihad in Abu Dhabi, Gulf Air in Bahrain along with their older counterparts of Saudi Airlines and Kuwait Airlines, have been investing massively and winning handsome custom. With much lower airport landing and takeoff costs and with the ability to fly non-stop over long distances, these airlines have been able to earn a lot of custom from Indians travelling to the US, African and European countries and other destinations.

Mounting losses with the consequent inability to invest continuously in the acquisition of new aircraft in large numbers, Air-India has been missing out this boom. Many of the bilateral agreements with several nations have been benefiting its partners and not so much Air-India. The corporation is yet to come out of the effects of its merger with Indian Airlines, loading it with an enormous under-employed workforce, diversified aircraft and ineffective management with bureaucratic control. Its once huge market share within the country has suffered severe erosion. With the recent new policy that permits newer entrants in the business to fly overseas, this competition is bound to intensify further.

Despite the large custom from South India, Air-India doesn’t offer direct, non-stop flights to Europe/US. The passengers are ferried to Delhi/Mumbai for such direct flights entailing higher travel time.

The policy of continuous recapitalisation by the government has mostly gone to keep the airline afloat. A bold new plan to revamp the finances and infusing substantial fresh capital can still enable this Indian icon to regain some of its past glory.

 

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