Thomas Cook (India) chairman Madhavan Menon said the Jet Airways crisis is a warning sign and that the frequent disruption in the civil aviation industry can be sorted out only when the government fixes “structural requirements” such as the high taxes imposed on aviation turbine fuel. In an interview with Nehal Chaliawala and Satish John, he said he was confident that his company could compete with banks for forex business and that “assisted travel” would continue to be relevant in the travel market despite the advent of online travel portals. Edited excerpts:
How does the current scenario of high airfares impact your business?
There are two parts to it – the domestic market and the inbound market. From an inbound point of view, it’s a temporary glitch. Most who are travelling right now booked their tickets in December and January. There’s at least three to six months’ forward planning in the inbound business. But any change or cancellation now is causing inconvenience and is not helping. Plus, there is a lot of nervousness about Jet Airways because a lot of people take it from overseas into India. And it was considered a premium product to travel. So yes, it’s a bumpy ride for the next few weeks.
How does the Jet Airways crisis impact Thomas Cook?
We are all focused on booking people on alternate flights. As far as the domestic holiday business is concerned, a lot of these bookings and the inventory were put in place before the crisis started. So, I don’t think it has affected us immediately.
We cannot speculate about what happens at Jet. What is important to understand is that this is a warning sign to us that if we don’t change the structural requirements, the ATF, then airlines are going to become increasingly difficult to operate. Today it is Jet, tomorrow it will be somebody else. And we have seen a history of this. We have seen multiple airlines, small and big, fold only because of this entire tax problem. In some states, the tax goes as high as 60-70%. What is happening at Jet is short-term. Fares will go up, but they will straighten out. This has happened before; it’s not new. The focus should be on how to deal with the structural issue.
25/03/19 Nehal Challawala/Economic Times
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How does the current scenario of high airfares impact your business?
There are two parts to it – the domestic market and the inbound market. From an inbound point of view, it’s a temporary glitch. Most who are travelling right now booked their tickets in December and January. There’s at least three to six months’ forward planning in the inbound business. But any change or cancellation now is causing inconvenience and is not helping. Plus, there is a lot of nervousness about Jet Airways because a lot of people take it from overseas into India. And it was considered a premium product to travel. So yes, it’s a bumpy ride for the next few weeks.
How does the Jet Airways crisis impact Thomas Cook?
We are all focused on booking people on alternate flights. As far as the domestic holiday business is concerned, a lot of these bookings and the inventory were put in place before the crisis started. So, I don’t think it has affected us immediately.
We cannot speculate about what happens at Jet. What is important to understand is that this is a warning sign to us that if we don’t change the structural requirements, the ATF, then airlines are going to become increasingly difficult to operate. Today it is Jet, tomorrow it will be somebody else. And we have seen a history of this. We have seen multiple airlines, small and big, fold only because of this entire tax problem. In some states, the tax goes as high as 60-70%. What is happening at Jet is short-term. Fares will go up, but they will straighten out. This has happened before; it’s not new. The focus should be on how to deal with the structural issue.
25/03/19 Nehal Challawala/Economic Times
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