Airlines play an oversized role in the economy of undersized countries. A good example is Singapore. A tiny red dot as it is sometimes called, its airline is globally popular, sets standards in operational efficiency, profits and services and provides thousands of well-paying jobs. But all that fades into insignificance when you consider the benefits to the local economy – in terms of attracting tourists, encouraging stopovers, providing cargo services and others. The business it drags in benefits so many others – couriers, logistics companies, catering and so on.
And the Singapore government, knowing this, actively supports the airline even spending billions of dollars to keep it going during the COVID years when the lack of a domestic market nearly floored it. It was sad to see the famed SQ girls serving in bars and restaurants, with reduced wages and forced leave. Of course, many flocked to such places exactly for that! Many years ago, when its pilot’s union tried to play tough, its no-nonsense PM, Lee Kuan Yew interfered and taught them a lesson they haven’t forgotten since. Look it up sometime. He knew the airline can make or wreck the Singapore story.
Even for large countries, the aviation sector plays a very critical role with positive as well as negative effects on a whole range of areas. The US was an early pioneer. China is an aviation giant and far ahead of us. Even without counting Cathay, they have two or three huge airlines with over 500 planes each. Mind you, their railways too is far more developed with dozens of bullet train routes across the entire country whereas we need Rihanna and NYT Editorial board’s kind approval and bear with snide remarks from every media crook to run one line, not to speak of PILs.
Obviously, this is not some sort of economic secret I have unearthed, it is common sense. But this common sense is exactly what was and in many ways is missing in India. Air India and its sibling IA were run to suit the fancies of its militant and pampered employee and pilot union, with the interests of the passengers or the nation coming a distant second, if at all considered. I remember the days when it was a monopoly and strikes used to be organised just before each peak season to extract maximum from spineless aviation ministers.
Who gained? Employees, present and future – no. Job growth and prospects were far below optimum as Indians avoided AI and later IA, giving the likes of SQ, and Emirates huge tailwind. It was reduced to a basket case with seats and toilets in ageing aircraft worse than suburban buses. For employees, customers were simply a nuisance that came with the job. Economy – a big NO as restricted competition and higher fares, lower efficiency etc. affected everyone involved. Taxpayers were even worse off – throwing money at it was like giving a nice garland to a monkey, a bottomless sinkhole.
But all that is history now that Tatas have taken over and running it. They need time to turn this huge Titanic around. And they need the support of whoever governs in Delhi.
But the announcement of the HUGE aircraft order brings the key issues back into focus.
Sadly, some of the old socialist mindset still persists. Nehruvian & Indira Gandhi socialism not just crippled the economy and turned India into an also-ran but the toxic effects on the mind, like those of Bhopal gas tragedy persist for decades. I must add it even subtly affects the thinking of many in the RW including BJP. We must rediscover our mercantile history and DNA.
Some on SM including Sumanth Raman were questioning the size of the order, implying it was too big. Is it? That is a laughable idea. Obviously, Tatas can screw up yet but that’s not the point. Let me explain why we are barely taxiing and the sky is still there to conquer.
Singapore Airlines has made a huge investment in AI Group and my guess is they will be happy to invest even more if we let them. The reason is simple – when the Indian aviation sector rediscovers its mojo, it stands to lose a lot of transit traffic. There ain’t that many big markets that can fill that void. Many Indians, for cultural, food and various other reasons will happily fly an Indian carrier if only there is a decent one.
No, we are not talking nationalism or misplaced patriotism here. To me, the sound of nice sitar music or old Bollywood song on instruments playing as I enter the aircraft in a distant land fill me with a joy that transcends many considerations. I feel like I am home already. Yes, others can copy and provide food etc., but then it is not the same. SIA, flush with cash and government funding, knows this and would rather have a finger in the pie instead of watching it disappear from a distance. Emirates, Qatar and others in ME must be thinking the same way.
That highlights the importance of Indian traffic to Europe, US and Far East as well as Australia-New Zealand. Indian carriers, lacking the right type of aircraft and of course reputation and in some cases landing rights, have a long way to go simply to grab a majority share of this market that is theirs to lose. IMHO just that market alone can easily justify the order size and perhaps even if Indigo or others place huge orders as well.
Then comes the question of attracting transit market from OTHER countries. Today our market share is a big ZERO. India is ideally positioned geographically. Why can’t a Thai or Indonesian or even Australian flying to Europe take AI or Indigo via Chennai or Hyderabad? Many indeed go through Bangkok flying Thai. After all we Indians fly Thai to Australia in huge numbers as cost is lower. Today it seems like a crazy idea. But pieces of the puzzle are falling in place.
Airports, under AAI, similarly run to suit employee interests, were worse than cowsheds and foreigners, even NRIs or PIOs would avoid like the plague unless he is forced to travel to India. Today we have several decent airports that can start looking at transit market. Yes, many are overcrowded as they were built or expanded twenty years too late but that can be easier to set right with private ownership and government nudge.
Simple entry and exit, less bureaucracy, faster and easier visa norms, adequate transit facilities and space, hotels nearby for those willing to explore a bit etc will further enhance the potential. We are still far behind Suvarnabhumi or Chek Lap Kok or even Kuala Lumpur. This will not suit SIA’s interests but with a decent stake, it very well might!
We are not even talking about the huge Indian economy and its domestic market that is just taking off and still has millions of people entering the middle class that have not flown even once in their lifetime. Yes, trains and roads are improving but stil l leave huge demand for airlines to fill. A lot of sectors easily justify aircraft with wider aisles and larger capacity. Which provides synergy with overseas operations.
In fact, the huge domestic market gives Indian carriers an edge that Malaysia, Thailand or even Indonesia will envy. And SQ, Qatar or Emirates can never have. The scale it adds can kill competition if we can be more efficient overall, not just in airlines but in the entire ecosystem. To repeat, we are barely scratching surface.
Last but not the least – talented staff. India has an enormous pool of young and fit men and women who can be trained to be pilots, cabin crew, maintenance engineers and in so many other areas. Other Asian countries lack this scientific, engineering and technological edge as well as scale. Our growing air force and military aviation adds further strength. It is a pity the years of crippling India’s aviation sector to pamper to militant leftist trade unions and their endless self-serving demands also killed the career and dreams of many young Indians.
I have not even talked about cargo as this article is primarily about passenger aviation. But even passenger planes carry a lot of cargo and can benefit from increased capacity.
The statements by Macron, Sunak and Biden which were much discussed in media as well as SM, provide a critical lesson – countries stand up for their corporates, openly support them and fiercely lobby for them. Australia backing out of a submarine deal with France even created a diplomatic mini crisis. Sadly, in our country, we have more “loyal” comrades questioning why we are not buying Huawei or banned TikTok than asking why we are not supporting Tatas or other Indian businesses.
Modi sarkar has been proactive and very much more business-friendly than other regimes but it has to up the game. It is time to stop looking over the shoulders to see what the corrupt fascist dynasts or their media coolies say. It is time to stop paying lip service to Nehruvian socialism as if it were a commandment from God. It is time Modi himself addresses this being the master communicator he is. It is time to tell the Indian public clearly and directly – that standing up for Indian corporates benefits them and creates jobs for their children. He must point out the corruption and hypocrisy of the Khan market elite that nit-pick everything.
As far as the aviation sector goes, the Indian government has to do a lot more. As I have highlighted, we are barely scratching the surface and there is a long way to go. At every step of the way our airlines need the weight of the government to tip the scale. Regulations, especially on safety, must be strict and best left to professional and independent bodies. But in all other ways whatever help is needed needs to be given. Lakhs of well paying PMET jobs are at stake. Perhaps like PLI, help can be given, linked to jobs created or other tangible benefits that people can see.
We simply can’t be a 5 trillion or 10 trillion economy with a third-rate aviation sector. In fact, we will not get there. I may not live to see it but there will sure be a day when 500 planes seem like peanuts.
With that in mind, let us say three cheers to Tatas and AI and wish them all the best in realising JRD Tata’s dream.
