Indian Aviation Sector – 20 years of the Open Skies Policy!

India is one of the fastest growing aviation markets in the world. The Airport Authority of India (AAI) manages a total of 127 airports in the country, which include 13 international airports, 7 custom airports, 80 domestic airports and 28 civil enclaves. There are over 450 airports and 1091 registered aircrafts in the country. In the early fifties, most of the operating airlines were merged into Indian Airlines or Air India and this monopoly under the Air Corporations Act continued till about the 1990s. 1991, was the year when the Indian Government came up with the Open Skies Policy and the Indian skies were never the same again.

As of today, India has 1 government airline (that’s if one considers Air India and Indian Airlines as “Indian” – which surely was, is and will be one of the biggest disaster decisions taken by anyone) and 7 private airlines – Paramount, Air Deccan, Jet (includes Jet Lite (formerly Sahara), Jet Airways and Jet Konnect), Spice Jet, Go Air, Indigo and Kingfisher (includes Kingfisher and Kingfisher Red (previously Air Deccan). I am not considering MDLR, Jagson Airlines and others because their market share is too low for them to bring about any kind of change in the Indian aviation scene.

The open skies policy introduced by the Government brought such a huge change in the aviation scene that suddenly everyone wanted to start their own airline. That’s the problem with our country. If there’s an opportunity to do something, everyone rushes to get into it without even realising if there are any problems or difficulties associated with it or whether everyone would be really so successful as the others in getting into that particular field. No one thinks about all this. At one time, phones were a luxury and the rates across the nation were really expensive. But then there was a plethora of mobile networks which started their operations and mobile communication rates reached the lowest in the world in India. But everyone started encountering the message “Is route ki sabhi line vyasth hain (All the lines of these route are blocked” because the networks were never built to encounter such a huge base of users. The same thing happens with roads, railways, infrastructure everything in our country. And as we will see, the same happened in the Indian aviation industry.

Jet Airways and Sahara Airlines were the first private airlines to begin their services after the Govt opened the skies to private players. And lo and behold! Change became the order of the day. People were treated to a much better and organized service with well groomed crews, better seats, easy options of ticketing and a good overall feel of being in an aircraft. People started flocking to these airlines like never before. But still the monopoly of the two – Air India and Indian Airlines remained on the international sector. They also had slightly cheaper rates than both the private players. In between, a lot of other lines like ModiLuft, East West Airlines, Vayudoot which had set up shop due to the expected boom in air travel had to close down due to reasons ranging from the death of the head to total bankruptcy.

Around 2003-2004, another revolution took place in the Indian aviation industry. This revolution was bigger than any other seen before and definitely bigger than the one in 1991. Simplify Deccan – an airline started by Captain Gopinath gave birth to the idea of Low Cost Carriers (LCC) or budget airlines as they are called in our country. He was single handedly responsible for making millions who had not even seen a plane let flown on it, dream of flying. With prices as low as 1 Rs (dont be fooled!! It doesn’t include taxes – I’ll get to that a little later”), no food (with the option of buying food at moderate prices – though some like Jet Konnect charge freaking 120 for a veg sandwich..GOODNESS GRACIOUS!!!!) but ya free water and no magazines or anything else and last but not the least air hostesses across all flights in skirts which made people all the more crazy (yeah male stewards are there only on Jet flights mostly). Basically if one doesn’t want to or doesn’t have the money to spend on other things, he / she can just buy the ticket, board the flight and reach his / her destination. He doesn’t need to spend money on all other activities. And as usual as things happen in India, since this model succeeded, even Spice Jet, Indigo and Go Air began their operations on this model. All these were owned by some industrialist or the other like the Modi family, the Wadia family etc. Suddenly the Indian aviation industry which had seen bad times during the 2001 WTC attacks started looking up. People were lining up in hordes to travel on planes like never before.

But then the bubble had to burst someday. With things like SARS, the economic depression, swine flu, terrorist attacks, the industry went into a tailspin. Something had to be done and fast. After years of serving millions of customers, Simplifly Deccan became Kingfisher Red and merged with Kingfisher. Kingfisher is and will always be India’s most luxurious airline. With its amazing service in terms of food, ground services, baggage handling and the overall feel of the aircraft one surely feels that he / she is in an international airline. It’s the only airline in the country to have been given a 5 star rating by Skytrax – The best airline rating agency in the world! The most famous or infamous however you may call it thing about Kingfisher is that it employs mostly models aged 20 – 25 as its airhostesses. On merging, Kingfisher Red though its still called a LCC, became a full cost carrier (that’s what I feel..Because one gets low prices on very few seats and those who get should book 1-2 months earlier!! So its just crazy) just that its prices were lower than Kingfisher. Jet Airways acquired Sahara (Jet Lite) and Air India merged with Indian Airlines. These steps were taken to prevent any airline from going bust and keep the Indian aviation industry in the green. But the worst was the merger of Air India and Indian Airlines. It ended up becoming a clash of people, planes and everything that is Indian. Both are the worst airlines as I have talked about in one of my earlier blog posts and are milked by every babu for his gain, have the worst service but still are bailed out. Why were the taxpayer’s billions spent on bailing them out?? Pathetic! is the word I can say for this. In between all this, Paramount Airways, an airline with a unique model of providing business class seats with economy class fares with use of Embraer Jets and having no middle seats was started in Madurai. It positioned itself as a business airline and after capturing a 27% market share in the South, it moved to the West, then East and is now set to move to the North. Recently it had the highest on time performance among all airlines. Slowly but surely, it has made a name for itself on the aviation map of the country.

In the midst of all this, our airport infrastructure has completely collapsed. Be it Mumbai or Delhi or Bangalore everywhere there are frequent delays running into minutes or hours. As I have always said, when the airports were built no one ever thought that so many people will fly. But interestingly in the case of the new Bangalore airport at Devanahalli which was built recently, after a few months the infrastructure developers realised that it was too small to service the population. God save our country!! One can only hope that GMR Infrastructure and the other private airport developers do a good job!

This sector is greatly expected to grow as the disposable incomes of the people across the country continue rising. But most importantly, until the infrastructure issues like the size of the airports, the number of airports, the ability to handle more no of planes etc are sorted out, we will continue to face the same problems that we have been facing over the years, day in and day out.