Clearing the runway: Can we make every Indian fly?

While many sectors have grown by leaps and bounds, a measly 3-4% of Indians travel by air. What ails the industry? How do we transform India’s mega airports into global aviation hubs like Dubai and Singapore? How do we create domestic hubs that reach deep into the country’s remote corners? Can we ensure that every Indian flies at least once a year by the time we celebrate 100 years of Independence? 

We must think and dream big. And dreams, to be realised, must be paired with flawless execution and deep reforms. If China—which just four and a half decades ago was rated a poor country in standards of living, per capita income, GDP, and other parameters—can today be ahead of Europe and within a hair’s breadth of overtaking and challenging the economic and military might of the United States, why not India? 

The 1991 reforms that opened up India’s aviation sector ended the licence raj and broke the monopoly of Indian Airlines and Air India changed the sector when a slew of private sector airlines were given licence to fly. But only two -- Jet Airways and Sahara--survived, resulting in cartelisation. Again, when the low-cost airlines took wing in 2003, it broke the cost and caste barriers to flying by penetrating deep into the rural hinterland. There was an implosion in demand that enabled common people to fly, and along with it, liberalisation of various other sectors propelled India into a vibrant and emerging economic power and a leader among developing economies. 

Sadly, while all sectors have thrived, Indian aviation has become ‘the sick man of India’. Thanks to choking regulations, high entry barriers, exorbitant fuel prices abetted by sky-high taxes, inefficient public sector airports paving the way for monopoly private sector airports that are extortionist in the absence of robust competition between airports, and in the absence of long-term visionary strategic policy that is subject to frequent knee-jerk changes, not just for airlines but for the gamut of the various sectors of aviation, the growth of aviation has again slumped. 

India’s aviation policies need a bold and imaginative rethink. Our bilaterals and open-sky policies should enable airports in Delhi, Mumbai, Bengaluru, Chennai, and Kolkata airports to become mega transportation hubs like Dubai and Singapore. Consider Emirates: It operates 118 Airbus A380 super jumbos, the largest of any airline in the world. Dubai Hub has enabled that. India, strategically located to link the West and Middle East to Asia and the Far East, must shed its inhibitions and diffidence while framing policies.

The number of Indians who buy air tickets in a year was 140 million in 2019, just before Covid ravaged the economy. After five years, we are just a few millions above that, struggling to cross 200 million. They are not 140 million different individuals as it seems. That number comprises frequent flyers of 35 to 40 million who form the bulk of the ticket buyers. This means fewer than 4% of Indians can afford air travel, placing us on par with some poorer African countries in terms of per capita consumption of air tickets, while Brazil, Malaysia, Indonesia, and China are far ahead. 

Since a little over a decade, Kingfisher, which took over Air Deccan, Jet, which acquired Sahara; Prime Air; and Go First have gone belly up. Spice, a remarkable feat of survival, has shrunk from 100 jets to under 30. More than 300 airplanes have exited the country. Indigo has grown into a behemoth, but the market itself has not expanded proportionately. Tatas have repossessed a doddering, bleeding Air India. And we now have a duopoly, and it does not augur well for the vibrant growth of aviation in India.

By contrast, Europe and the US, with less than one-fourth of India’s population, have 195 and 98 passenger airlines, respectively. Even Brazil, with one-seventh of India’s population, has 15 airlines. China has 20. How many should India have?

The ‘Start Up’ campaign is a laudable initiative by Prime Minister Narendra Modi, but it is largely the driving force behind high-tech companies disrupting many conventional businesses. It must spread to other areas. Aviation is integral to equitable economic growth to be globally competitive and to harness large swathes of India struggling with poverty and unemployment. Passenger airlines and air cargo subsume geography and knit remote areas together and drive investments deep into the bowels of the country, giving them access to markets and boosting tourism, which is the largest employment generator in the unorganised sector. 

With mega airports controlling air and ground space, it is well nigh impossible to connect small rural regional towns from large metros, stunting regional connectivity despite the commendable UDAN initiative. And where slots are available with difficulty, costs are prohibitive. We must build low-cost terminals alongside mega airports. 

London has six international airports, which help the growth across multiple directions. While Heathrow Airport is a mega hub and Gatwick a smaller one, the other airports, like Luton, cater to low-cost airlines like Ryan Air, which carried 198 million passengers last year, which is equal to all the domestic passengers who flew in our country during the same period.

We need multiple airports that compete, just as we need many airlines with different stakeholders. That is the surest way to expand the market at the bottom of the pyramid. 

India’s air cargo growth is languishing and is almost zero. Hong Kong Airport alone handles more cargo than all our 100 airports put together. Air cargo integrated with roads, rail, and ports is the blood vessel of a growing economy. It is critical to understand that for passenger airlines to grow, you need reforms in all areas of aviation: air cargo, airports, and aviation fuel taxes—state and central. The MRO (Maintenance, Repair, and Overhaul) is in a dismal state. The labyrinthine taxes, customs, and other duties and tortuous rules to bring in parts and repair and overhaul, and re-export or use it on our aircraft are a deterrent, and all airlines send their aircraft for major MRO to Dubai, Singapore, or Lufthansa Technic, where many Indian technicians are employed. Similarly, the charter business has remained stagnant. It is the breeding ground for pilots and engineers who feed the airlines. And the irony is, we have around 4,000 pilots and thousands of technicians unemployed, and we have to import foreign pilots and engineers, pushing up costs. 

Our DGCA cadre needs to be modernised, well-staffed, motivated, and incentivised. Just as the Atomic Energy Commission and ISRO are headed by scientists, the DGCA must be helmed by an aviation professional instead of the ubiquitous IAS bureaucrat who may have been heading an animal husbandry department earlier. All these need comprehensive overhauling and deep reforms.

Despite the setbacks and deterrents, there’s a silver lining. Whatever India may not possess, it has an inexhaustible market and largely untapped potential. That gives hope. Only one question has to be asked by policymakers: What should the government do to make common Indians fly? How do we take the present 4% who are flying to 50% in the next two decades?

That will show the roadmap to the future we all aspire to.

(The writer is a soldier, farmer, and entrepreneur)