Blaming everyone else

Private airlines have called off their “strike” planned for August 18 but India’s airlines are clearly a disgruntled lot. Their sense of grievance has been building for some time, culminating in recent demands which focus particularly on airport fees and fuel costs. They have a point: airport fees, especially in Delhi and Mumbai, have been revised to the airlines’ (and customers’) disadvantage to benefit contractors who inappropriately underestimated their costs; and, the price of air turbine fuel (ATF) is kept high because of India’s dysfunctional energy policy.
But if the airlines think that this absolves them from responsibility, then they’re wrong. The airline business is tough. It requires corporations that can both plan — given the massive purchases and sunk costs involved — while also being nimble: to respond to political constraints, sudden changes in travel patterns, variation in fuel prices. Simply put, the complainers have failed to do this. In the short- and medium- term, they have made bad corporate decisions; and their overall business plans are poorly thought out and are the primary cause of the crisis. It is no coincidence that, even though some “low-cost” airlines had joined the strike call, they’re making profits while “full-service” airlines like Kingfisher and Jet are massively in the red.
03/08/09 Indian Express

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Categories: Indian Aviation- In General Aug 2009