Indian Airlines In A Robust Mood

Enthusiastic about the aviation boom, Indian airlines are braving their hearts to take part in the global competition. Airlines are thinking big. India’s oldest airlines, Air India and Jet Airways, are aggressively looking to expand their global reach by introducing a new service almost every month. Both the airlines have been ruling the sky for so many years. Jet Airways aspires to be among world’s top five in the next five years, whereas Air India, post-merger already among Asia’s top 10 airlines because of its fleet size, is ready to take on market leaders like Singapore Airlines and Emirates. Indian airlines not shying away from the competition; rather they are creating competition for already-settled airlines.

Their thrust for connecting more and more international destinations only tells the story of India’s aviation boom that the country has been witnessing in past 3-4 years. The country is witnessing robust growth in the number of air passenger. No international carrier wants to loose the opportunity to cash in on India’s aviation boom. The Indian Civil Aviation Ministry is bombarded with dozens of applications every month from the international airlines to start new service or increase their connectivity to India.

The Government is allowing foreign carrier to fly into the country thanks to its open sky policy. But it is still skeptical about relaxing norms for Indian airlines like Kingfisher Airlines, SpiceJet and others who are trying hard to get permission to fly abroad. The question arises why to stop less experienced (according norms airlines need to complete five years for flying overseas) Indian carrier from flying overseas, whereas, foreign airlines such as Etihad or Jazeera Airways which are newly formed can fly into India. Government’s skepticism towards the young airlines may play spoilsport for the country’s aviation growth story.

Though the industry is in the robust mood for its growth, the infrastructural handicap and high operating cost in India are haunting the airlines. Most of the domestic airlines are seeing red in their balance sheets. Airlines need funds to stand up to the global competition. Presently, direct or indirect investments from foreign airlines are not permitted in India and the Foreign Direct Investment (FDI) limit in domestic airlines is 49 per cent. Indian airlines should get the opportunity to see inflow of funds in the form of equity investments by foreign airlines. Government should further liberalize the FDI up to 74 per cent and encourage foreign equity investment. Foreign airlines can not only bring the much-needed funds but also technical expertise in the aviation sector.

India’s aviation growth is second fastest to China in the world. Both Airbus and Boeing predicted large orders for aircraft to come from these two countries which will lead the aviation world in the coming days. There are many steps that the Government has to take first to lead the world. India can no longer afford to see itself out of the global competition. It has to srike now.