Wednesday, December 25, 2019

Air India shouldn’t fly past North East

As the deadline for the privatisation of Air India approaches, much is afoot. This includes union opposition, a lack of investor interest, and an NCLAT judgment for one of Air India’s suitors. The government, however, is firm in its resolve. After all, Air India continues to bleed, with no respite in sight. Its FY19 loss was Rss 8,556 crore; FY20 will likely be worse. This, after the government infused `17,320 crore of taxpayer money over the last five years. Needless to say, the situation is unsustainable. Yet, in the rush to privatise, the connectivity to the North East may have been overlooked.
India’s NorthEast (NE) comprises of the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura, also known as the seven sisters. An ethnically, culturally, and geographically diverse region, the NE is connected with the rest of the country through a narrow corridor of approximately 21 kilometres. Within the NE, connectivity initiatives are underway, the most famous being the Bogibeel bridge that connects Dibrugarh to Dhemaji, supplementing the Kolia Bhomora Setu. However, such projects have long gestation periods, and are focused on intra-regional connectivity. Air connectivity, therefore, continues to be the fastest and most economical means.

This connectivity challenge was partly addressed by the poorly thought-out Route Dispersal Guidelines (RDGs). But, in a classic case of intent versus impact, airlines started plying on these routes for compliance rather than connectivity. As such, most airlines include routes that had high demand—Srinagar, Jammu, Guwahati, and Bagdogra—in their network. The structure of the network can be adjusted to ensure compliance.
When this did not work, the government, in 2016, launched the regional connectivity scheme UDAN. This included subsidies for NE routes. However, there have been few takers. In the four iterations of UDAN, UDAN-1 did not have any routes in the NE; UDAN-2 connected Tezpur, Jorhat, Lilabari, and Pakyong (Tezpur and Pakyong operations have since ceased); UDAN-3 connected Lilabari, Guwahati, Imphal, and Dimapur route, but all have been loss-making; and UDAN-4 has six airports from the NE listed as priority areas, and an additional 23 unserved airports. Several airlines have attempted to start operations in the NE, but without much success.
25/12/19 Satyendra Pandey/Financial Express
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