Opportunity as threat

Indian aviation is turning out to be more talked about than tourism itself these days, which is interesting given that it was usually considered its reliable subset. It is this phenomenon and the opportunities and challenges therein that a clique of aviation experts converged to ponder at an event organised by this publication. The inferences were telling. The sector is growing by more than 20 per cent annually, more planes are on the way, air travel is commonplace even for the middle class and is generating an enterprising excitement, similar to the one in the US before it cemented its place as the world's biggest aviation market. Low cost carriers have made air travel a household affair and elevated the Internet to an increasingly approachable platform for booking flights. Then again, India, as strikingly unique a market as it is, its pitfalls are also unfortunately endemic.

Airport infrastructure has been woefully beneath the crest of growth. The acute shortage of pilots and maintenance personnel, absence of general MRO facilities forcing airlines to bleed capital on outsourcing this overseas (a problem that the deluge of more aircraft will only aggravate), and the insensitive taxing, both directly and indirectly of the airlines and its flyers in an already inhospitable environment has seen every airline entrenched in the red. The ‘hub’ opportunity which India may have presumably relinquished is another that merits brooding, given how cities like Singapore, Dubai and Kuala Lumpur have built their economies around their airports and to a large extent, at the expense of Mumbai and Delhi. Air India CMD V Thulasidas, at this forum, drew a parallel between the American and Indian airline business, pointing out how the former had clawed back into the green in the aftermath of 9/11 by reigning in costs and repositioning operations. Interestingly, he also alluded to the wave of consolidation that has swept the American aviation industry indicating that this may well play out in India as well with some of the start-ups folding up. The imminent merger of Air India and Indian may perhaps be the only pleasant face of consolidation in the sector.

Further, the airlines, in more subtle ways, are asserting that travel agents who in spite of the service value they bring to the equation, are a dispensable avenue of distribution. The travel agents, for their part, have seen this coming for a while and see themselves as an embattled lot, deserted by the airlines and now threatened by a generation of online travel agents, buoyed by changing consumer perceptions about the Internet.

The historical similarities between hospitality and aviation are striking, in so much as when the former was poised for exponential growth in 2002, it was confronted with a mass exodus of manpower to more lucrative service verticals like cruises and call centres. While hospitality chugged on to sinful profits, it remains haunted by unacceptable levels of staff attrition. Aviation is poised at a similar juncture, albeit its problem is exacerbated by the fact that the skill sets it requires are far more complex. History appears to have repeated itself, and in a far more dangerous manner. Clearly then, aviation and its irreversible growth has swept along with it a slew of opportunities riddled with complications that are both changing the dynamics of the way business is done and threatening its very, profitable existence. This historic scenario places Indian aviation in the unique and uncomfortable niche where opportunity is also a threat.

Bhisham Mansukhani
Chief Reporter (Aviation)
editorial.etw@expressindia.com