2010-09-09
After getting nationalised in the fifties, private domestic airlines began re-emerging in India in the nineties. The popularity of the new private airlines went up fast as they provided better service and on-time performance with new aircraft. Then the concept of low-cost carriers (LCCs) was introduced and it found great acceptability. By the late nineties, LCCs had evolved from being marginal players in the market to occupy a dominant space, with their share of passenger traffic overtaking the full service airlines. The DGCA of India also did away with price control of tickets. A liberalised domestic market offered flexible pricing of tickets. Since airline seats became perishable like vegetables,ticket prices started varying from day to day and hour to hour. Internet sales helped.
This brought in a social revolution that was second only to the telecom one—wherein cheap cellular phones became a social and business necessity—in terms of impact. With airline tickets hitting bottom, the middle class discovered new freedoms—to travel for business and pleasure by air. The profile of air travellers was transformed. An experience largely restricted to government and corporate travellers opened out to students, housewives, self-employed small and medium entrepreneurs. New demographics were won over by LCCs’ charms.
The next advance took place at the start of this century, when private airlines were permitted to fly abroad—albeit with the unnecessary condition that it would take domestic airlines five years to qualify for foreign operations. Nonetheless, Indian airlines are now beginning to compete with the best in the world. Meanwhile, our airports were in a shabby condition and needed a lot of improvement. Kerala took the lead in 2000, coming up with a brand new airport in Cochin. Hyderabad and Bangalore followed suit. This was followed by the modernisation of Delhi and
Mumbai airports through long-term concessions.Now that we have a reasonably modern civil aviation infrastructure in place—with large domestic traffic and good international connectivity—what should be our next step? To me, the obvious answer is to create an international hub in India. What exactly is a hub? A hub is a place where a large number of airlines meet from different destinations and exchange passengers. India is well-located in Asia, connecting Europe with Far-East and Australia. Unfortunately, since we did not have good airports nor did we encourage a liberal policy towards bilateral air service agreements (except in the last few years), we missed the opportunity that Singapore and Dubai exploited to emerge as key hubs in our region (although their own domestic traffic was negligible). We need to correct this mistake. How can we develop a hub? A hub requires a good, friendly airport where waiting and flight transfers are facilitated in a comfortable fashion. It also requires the city where it is located to be service efficient and tourist friendly. Post-Commonwealth Games, it is hoped that Delhi will show these attributes. The Heathrow airport in London has come up as a major hub as it developed into a great point of interchange—with the airport providing modern facilities even as the city of London provides a good space for a break. In the East, Singapore developed as a hub after it split with Malaysia. First, it developed an airline and then a hub. Similarly, Dubai decided to first develop an airline and then an airport.
In India, with the new T3 terminal in Delhi, there is scope for developing a hub. The Delhi airport has two parallel runways that provide growth potential and it is the busiest airport in India. Unfortunately, the existing Mumbai airport cannot grow due to limitations of land, and the fate of a second airport is in a limbo, thanks to Jairam Ramesh. It is now time for the government to take a concerted decision to develop an international hub in Delhi. For this, it will have to encourage more flights into Delhi even though our own airlines may seek to guard their turf. We also need to encourage bigger aircraft like Airbus 380 to land in Delhi to create the critical mass required to create a hub and compete with the likes of Singapore and Dubai. The creation of a hub requires a good airport (which we now have) and flights coming in from all directions, with both domestic and international connectivity. The advantages of developing a hub would be many. For example, a hub provides an increase in localised tourism and overnight stays; it provides an incentive to do business in the region. However, the state government of Delhi needs to play a more proactive role in airport hub development, as it will enhance the city’s brand value rather than just sitting back and taking undeserved credit.
The author is chairman of the International Foundation for Aviation and Development (India chapter)
After getting nationalised in the fifties, private domestic airlines began re-emerging in India in the nineties. The popularity of the new private airlines went up fast as they provided better service and on-time performance with new aircraft. Then the concept of low-cost carriers (LCCs) was introduced and it found great acceptability. By the late nineties, LCCs had evolved from being marginal players in the market to occupy a dominant space, with their share of passenger traffic overtaking the full service airlines. The DGCA of India also did away with price control of tickets. A liberalised domestic market offered flexible pricing of tickets. Since airline seats became perishable like vegetables,ticket prices started varying from day to day and hour to hour. Internet sales helped.
This brought in a social revolution that was second only to the telecom one—wherein cheap cellular phones became a social and business necessity—in terms of impact. With airline tickets hitting bottom, the middle class discovered new freedoms—to travel for business and pleasure by air. The profile of air travellers was transformed. An experience largely restricted to government and corporate travellers opened out to students, housewives, self-employed small and medium entrepreneurs. New demographics were won over by LCCs’ charms.
The next advance took place at the start of this century, when private airlines were permitted to fly abroad—albeit with the unnecessary condition that it would take domestic airlines five years to qualify for foreign operations. Nonetheless, Indian airlines are now beginning to compete with the best in the world. Meanwhile, our airports were in a shabby condition and needed a lot of improvement. Kerala took the lead in 2000, coming up with a brand new airport in Cochin. Hyderabad and Bangalore followed suit. This was followed by the modernisation of Delhi and
Mumbai airports through long-term concessions.Now that we have a reasonably modern civil aviation infrastructure in place—with large domestic traffic and good international connectivity—what should be our next step? To me, the obvious answer is to create an international hub in India. What exactly is a hub? A hub is a place where a large number of airlines meet from different destinations and exchange passengers. India is well-located in Asia, connecting Europe with Far-East and Australia. Unfortunately, since we did not have good airports nor did we encourage a liberal policy towards bilateral air service agreements (except in the last few years), we missed the opportunity that Singapore and Dubai exploited to emerge as key hubs in our region (although their own domestic traffic was negligible). We need to correct this mistake. How can we develop a hub? A hub requires a good, friendly airport where waiting and flight transfers are facilitated in a comfortable fashion. It also requires the city where it is located to be service efficient and tourist friendly. Post-Commonwealth Games, it is hoped that Delhi will show these attributes. The Heathrow airport in London has come up as a major hub as it developed into a great point of interchange—with the airport providing modern facilities even as the city of London provides a good space for a break. In the East, Singapore developed as a hub after it split with Malaysia. First, it developed an airline and then a hub. Similarly, Dubai decided to first develop an airline and then an airport.
In India, with the new T3 terminal in Delhi, there is scope for developing a hub. The Delhi airport has two parallel runways that provide growth potential and it is the busiest airport in India. Unfortunately, the existing Mumbai airport cannot grow due to limitations of land, and the fate of a second airport is in a limbo, thanks to Jairam Ramesh. It is now time for the government to take a concerted decision to develop an international hub in Delhi. For this, it will have to encourage more flights into Delhi even though our own airlines may seek to guard their turf. We also need to encourage bigger aircraft like Airbus 380 to land in Delhi to create the critical mass required to create a hub and compete with the likes of Singapore and Dubai. The creation of a hub requires a good airport (which we now have) and flights coming in from all directions, with both domestic and international connectivity. The advantages of developing a hub would be many. For example, a hub provides an increase in localised tourism and overnight stays; it provides an incentive to do business in the region. However, the state government of Delhi needs to play a more proactive role in airport hub development, as it will enhance the city’s brand value rather than just sitting back and taking undeserved credit.
The author is chairman of the International Foundation for Aviation and Development (India chapter)
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