Tuesday, May 19, 2020

Indian aviation missed a 1991 moment

As Finance Minister Nirmala Sitharaman took the centre stage on May 16 and uttered the word “aviation”, a few heartbeats skipped. A day earlier, the FM made announcements about agriculture – which was dubbed as the 1991 moment for the sector. Would aviation get a similar treatment?
While aviation and agriculture are at opposing ends of the spectrum, both have some similarities. Some of them are customers complaining about the trifling price increases, a farmer or an airline taking home little profit and operating on thin margins and long-term debt. While farmers get a waiver or two occasionally, airlines do not. That is because successive governments have seen aviation as luxury and not on priority to move the economy in a country as large as India.
Aviation was liberalised in the early 1990s leading to a spate of private carriers. None of them are in operation today. While it remained amply clear that cash sops will not be forthcoming, the industry and the wider aviation community hoped for a little respite in other ways — especially after governments in the US, Germany, Italy, France and the Netherlands, among others, announced measures to help the airlines directly and indirectly. The finance minister doled out all but three sops for aviation and they were old wine in a new bottle. Airlines have been left high and dry.
The aviation ecosystem comprises airlines, airports, MRO, ground handling agencies, sky kitchens, travel agencies and other tertiary sectors that are suppliers to these main ones. All the three sops are hardly new.
On May 1, Prime Minister Narendra Modi held a meeting. The outcome outlined that Indian Air Space should effectively be used in a manner that flying time is reduced, benefitting travellers through shorter flight times and subsequent cost benefits. This formed part of the first sop for aviation with resultant saving estimated at Rs 1,000 crore annually.
18/05/20 Ameya Joshi/moneycontrol.com

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