The Role of Aviation sector in India

The Indian Aviation sector is poised to take off and soar high in an unprecedented manner.
Indeed, the Aviation sector in India has come a long way from the humble beginnings in the
pre-independence era where the legendary JRD Tata, pioneered the industry and introduced a
small turboprop plane as the first connection to the outside world by air. Now, the Aviation
sector is a stage where it boasts of world-class airports, best in the breed airlines, and an
enviable safety record, though minor skirmishes are reported often. From being a preserve of
the rich to the present where the Aam Admi is the focus of the airline industry, the aviation
sector mirrors the
development and evolution of the Indian Economy over the decades.

Added to this is the fact that successive Indian Governments since the 1990s when the Indian
Economy was liberalized have actively encouraged the development of the sector by providing
subsidies and establishing world-class airports, though at a tardy pace given the inherent
complexities of the Indian political and socioeconomic landscape.

How the Indian Aviation Sector Became World Class

Having said that, it is also the case that the crowning glory of the Indian Aviation sector lies in
the dirt cheap prices that are offered to the passengers and which are among the lowest in
the world
as far as LCC or Low Cost Carriers are concerned. Talking about LCCs, the Indian Aviation
sector was
among the first in the developing world to take the LCC route with Capt Gopinath launching
Deccan
Aviation or Air Deccan which had the logo of the famous cartoonist, RK Lakshman's common
man
flying. Though it is another matter that Air Deccan was acquired by the now defunct Kingfisher
airlines, whose high flying promoter, Vijay MaIya, went bankrupt a few years ago, the fact
remains that the LCC concept caught on among other airlines well. Talking about the
personalities and the airlines that have dominated the Indian Aviation sector, it is the case
that most of the Airlines which took advantage of the liberalized Indian Economy in the 1 990s
were essentially one person shows meaning that the promoters or the CEOs often had a larger
than life presence.
Premier to Poor: The Air India Saga

No case study on the Indian Aviation Sector is complete without a discussion on the national
carrier, Air India, the merged entity representing the erstwhile Air India and Indian Airlines,
the domestic carrier. While it is now routine for commentators to lampoon Air India, it needs
to be remembered that it was the premier Indian carrier in the post Independence era until
the liberalization of the Indian Economy. Having said that, the wheel has come full circle and
hence, its present status as a loss-making entity that is depending on governmental bailouts to
stay afloat means that perhaps it is time to privatize it. Indeed, its portfolio of landing rights
and code share agreements as well as its fleet, though ageing, makes it attractive to foreign
and domestic players alike who can convert these advantages into their own and at the same
time, restructure it in such a manner that it becomes possible for it to become profitable
again. Thus, it needs to be watched as to what decision the political masters take in this
regard. It can be said that politics plays a major role in determining the fate of Air India since
there is the aspect of emotional and sentimental reasons as well.

Conclusion

It goes without saying that there are some measures that would minimize the path ahead for
the sector. To start with, the present agreement on not having two airports within 150
Kilometers of each other can be reviewed especially where Bangalore and Hyderabad
are concerned. In both these cities, the airports in operation earlier have been mothballed
despite massive investments in them mainly because the new airports and their owners
specified the agreement on distance. By reopening the old airports, sign Ticant capacity can be
added thereby both lessening the load on the new airports as well as furthering the growth.
To conclude, it can be said that it is a mixed bag as far as the Indian Aviation Sector is
concerned wherein it is soaring high but also faces turbulence ahead.