Date:27/09/2005 URL: http://www.thehindu.com/2005/09/27/stories/2005092703021000.htm

Opinion - Editorials

Indian Airlines set to take off at last

Indian Airlines's $ 2.2 billion deal with Airbus Industrie for buying 43 aircraft is something of a breakthrough. The deal had to negotiate one hurdle after another over the past three years. The inordinate delay in aircraft replacement and acquisition has proved extremely costly. At a competitive juncture in aviation history, the entire operations and future plans of the domestic public sector airline were kept off balance. Indian Airlines will continue to be handicapped for quite a while since the first of the new aircraft will be delivered only by August 2006. But the airline will use the immediate option of taking on wet lease at least five aircraft to meet the urgent operational needs. Its rivals in the domestic aviation scene acquired new aircraft, went in for lease arrangements to capitalise on the liberal open skies policy of the Centre, and catered to a new generation of airline passengers in a highly competitive situation. It is high time the public sector IA got through the mesh of official red tape and political clearance to replace not only its vintage Boeing 737 aircraft, but also some of the ageing Airbus planes, before they lose their "airworthiness." The airline's management will have to fine-tune its schedules to cater to the high density routes, without abandoning its old commitments to regional services.

It was significant that the Airbus deal was announced at the India-European Union summit, on the eve of Prime Minister Manmohan Singh's French visit. France, a long-standing ally and strategic partner, has been palpably unhappy about the way New Delhi decided on an all-Boeing order worth close to $ 6 billion for its other national airline — Air India. True, Indian Airlines had opted for the Airbus family, since the bulk of its present fleet belong to the A 320 fly-by-wire edition. It will now acquire an assortment of A 319s, A 320s and A 321s over the next few years. In addition, the Aviation Ministry has got Airbus to agree to set up full-fledged facilities here for the maintenance and overhaul of Airbus aircraft, in addition to training facilities. Given the competition in the skies — for aircraft and operations — the public sector IA and AI have to think beyond mere acquisition of aircraft. They should be equipped to become service providers for their own competitors, so that a few profit-centres can be set up as part of the airlines. With the fares touching new lows and occupancy posing problems on account of intense competition, AI and IA will have to think up new strategies to remain profitable. The Government of India and its Aviation Ministry must also take a more businesslike view of the national carriers and enable them to become functionally independent so that they can take their own decisions on the basis of sound commercial parameters and ground realities. They too need a level playing field.