‘Counting On India’s Opportunities Unlimited’

TAAI members had the privilege to listen to one of the most intellectual aviators who also happens to be Indian. Bhisham Mansukhani presents Rono J Datta, president, Air Sahara views on the business of international aviation and how India could become a relevant player

Struggling To Learn

The struggle for profits is an appropriate way for me to convert the audience to an aviation experts. It really has been a struggle. Ever since the Wright Brothers invented the airplane, the cumulative loss of the airline industry collectively has surpassed the profits. Few other industries can claim such a distinction. We have to wonder why? Perhaps revenue management can give us a better idea of how an airline makes money. There are really six things that it can do -- network, city share, product, yield management, loyalty programmes and alliances. Network is the backbone of the airline's sustenance.

Interestingly, the worst thing an airline can do is to distribute itself in various cities because that is the easiest way to lose money. The airline product includes the airport, staff service, pilot efficiency. Yield management entails capturing the price sensitive and insensitive by creating buckets of flights in separate time frames.

Hub: A Necessity

The biggest tragedy for India is that it only provides the feed. India does not have a hub. The aviation minister Praful Patel made a reference to this as well. Now, this is a huge loss for India. Frankfurt, Dubai and Singapore are constantly taking traffic out of India, consolidating it and then taking it forward. All major financial centres across the world are first and foremost aviation hubs which are necessary because access is a primary concern. There is no financial centre between London and Singapore. This huge economic terrain should belong to India but its failure to develop an aviation hub, has been overlooked. Now, this issue has been bothering me a lot for years because I have witnessed the power of a hub first hand. It is the reason I returned to India. I have seen what a hub can do for the local economy. Hubs like Frankfurt and Chicago can generate US$ 35 billion for the local economy. That is the kind of potential India is sitting on. I do not think the government can create a hub on its own. It needs the sector to pool in.

Access: An Essential Aspect

More access is good but needs to be allowed judiciously. Let us consider the Bombay Singapore route. Air India can only compete with Singapore Airlines for traffic that flies to Singapore. Singapore Airlines on the other hand can tap passengers that fly to Australia and the US. To counter this advantage, Air-India should be allowed access to all the domestic traffic generated from satellite cities or else when Singapore Airlines gets access to these cities, the national carrier will not stand a chance. This shows that although more access is good, there needs to be a balanced view. Unless you allow domestic carriers to create hubs, the country not only loses out on the aviation front but on the broad spectrums of benefits that a financial hub enjoys. This is the message that needs to put forward strongly.