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DH 2017- A look back at the business of flying

Hrithik Kiran Bagade, Bengaluru, DH News Service, Dec 7 2017, 18:20 IST
DH file photo

DH file photo

It was the best of times and yet somehow it was the worst of times for the airline industry this year.

Using this slightly altered quote written by Charles Dickens to begin the book "A tale of two cities," to describe the state of the aviation industry in India is rather fitting.

While the best features such as the growth of the industry, newer routes, planes and security procedures, shone brightly, the worst—a spate of unfortunate incidents involving passengers and airline staff and crew getting into scuffles and fistfights—was not trailing far behind.


Flag carrier Air India is faced with the government’s inability to cope with its debt of Rs 52,000 crore. The state-owned airline has been ached with intense competition from more nimble, low-cost carriers domestically, while internationally, leading global carriers are successfully serving the Indian market.

On June 1, 2017, DH had reported that the Cabinet would take a call on Niti Aayog’s suggestion to privatise Air India, as the talks came against the backdrop of arguments that there was no point in the government pumping in money into the debt-ridden airline as part of its Turn Around Plan and Financial Restructuring Plan (TAP-FRP). Civil Aviation Minister Ashok Gajapathi Raju also said that all options, including disinvestment, was being considered to take it to a new high.


On June 28, 2017, DH reported that the Cabinet had given an "in-principle" go-ahead for the strategic disinvestment of Air India, after tasking a Group of Ministers to work out its modalities.


On June 29, 2017, DH reported that Low-cost carrier IndiGo, which is also the country’s leading airline by market share, had shown keenness to buy stakes in Air India, within hours of the government’s nod for disinvestment. Sources mentioned that IndiGo had been looking at buying the international operations of Air India and Air India Express, and if this option was not available, then it would be in for buying it as a whole. The plan was to push its international operations, having already established dominance in the domestic space.


On July 6, 2017, DH reported that IndiGo is not keen on signing a JV with the government in running Air India. Recently, Jet Airways and SpiceJet have also shown interest in the government’s Air India divestment drive.


UDAN

With India slated to become the third largest airline market by 2020, and the largest by 2030, the government this year has resolved to push air connectivity in all ways possible, including regional connectivity. The UDAN (Ude Desh ka Aam Naagrik) is the Centre’s pet Regional Connectivity Scheme (RCS) that took off early this year. Under UDAN, the Centre had estimated that about Rs 205 crore would be spent per year as viability gap funding (VGF) for operators chosen in the first round of bidding. The airlines which won the bidding were Alliance Air, SpiceJet, TruJet, Air Deccan and Air Odisha, and they would operate 128 routes in which the airfare is capped at Rs 2,500 for an hour-long flight with up to 40 seats on each flight.

On April 1, 2017, DH reported that Mysuru is also being considered to be covered under UDAN.


On April 13, 2017, DH reported that the Karnataka Cabinet had approved a proposal to extend sales tax concession of 1% on ATF and to provide land free of cost to help implement UDAN in the state. On April 27, 2017, the first UDAN flight took off on the Shimla-Delhi sector flown by Alliance Air, followed by Kadapa-Hyderabad and Nanded-Hyderabad sectors by TruJet.


On May 25, 2017, DH reported the government’s plan to modify the UDAN scheme to allow flights between two unconnected cities, even if both have functional airports.


On August 24, DH reported that the government had unveiled new norms under RCS to attract more airlines to operate services in Jammu and Kashmir, the North East, Andaman and Nicobar and Lakshadweep.


On September 1, 2017, DH reported that commercial flights from Mysore Airport would resume from September 15, with TruJet operating flights between Mysuru and Chennai.


On November 14, 2017, DH reported that the government had received 141 initial proposals from 17 bidders in the second round of bidding under UDAN, of which, 108 were related to fixed-wing aircraft, while the rest were for chopper services.

On November 22, 2017, DH reported that the Karnataka would see additional cheaper flights connecting smaller destinations.

New routes

Bengaluru, home to the third busiest airport in the country, is fast becoming a serious hub for airline traffic from India to across the world. This year, IndiGo announced its Bengaluru-Singapore direct flight, while on October 30, 2017, Jet Airways commenced its Bengaluru-Amsterdam flight.

New aircraft orders

As the industry grows, Indian airlines have made a beeline to acquire new aircraft.
On August 8, 2017, DH had reported that divestment-bound Air India would be raising $740 million to buy six new Boeing 787 Dreamliners, while it was looking to raise $535 million to fund the acquisition of three Boeing 777-300ER planes.


On June 20, 2017, DH reported that SpiceJet announced its intention of buying 50 Q400 planes from Bombardier valued at a list price of $1.7 billion, a day after signing up 40 737 MAX aircraft from Boeing.


On November 17, 2017, DH reported that IndiGo on Friday took delivery of the first of its 50 ATR aircraft in Toulouse, France, expecting to add seven ATR 72-600 aircraft by March 2018 to speed up its regional connectivity plans.

Security tags
From April 1, 2017, stamping of passengers' hand baggage at seven major airports, including Delhi and Mumbai, was done away with, which DH had reported the previous day. The other airports that introduced the procedure the same day included the ones in Bengaluru, Hyderabad, Kolkata, Kochi, and Ahmedabad.

No-fly list

This year also witnessed a spate of unfortunate incidents involving passengers and airline staff and crew getting into scuffles and fistfights more than once. While on some occasions, passengers were caught attacking airline staff, there were moments which were the opposite. In a few incidents, Members of Parliament were captured on camera involved in gross misconduct.

On September 9, 2017, DH reported that unruly passengers could face a life ban in such an event, as the government unveiled the first guidelines in the national ‘No-Fly List’, which it said is “unique and first-of-its-kind in the world”.

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