Air Transport World

Backtracking in Bombay.(India's private carriers)

BOMBAY--The Indian government finds itself hoist by its own civil aviation policy -- or lack of--petard. As winds of liberalization have swept the country, the Ministry of Civil Aviation has been forced to play a dual role: Protect the interests of state-owned Air India and Indian Airlines, while going along with the new economic policy of making room for growth of private airlines.

Having allowed establishment of the private carriers, first as tourist-carrying air taxis back in 1990 and then, acceding to their demand to operate scheduled services but without "official" recognition, the ministry has had to modify its stance as the situation developed. The way this policy shift has taken place over the last few years is worth noting.

First, the air taxis were allowed to function as nonscheduled airlines with restrictions on aircraft size (15-50 seats), departures (not within 2 hr. of Indian/Vayudoot flights) and on repatriation of funds.

These restrictions have been removed but the private carriers remained in limbo, pending the repeal of the Air Corporations Act, which specifically barred them. The situation remained confused enough to provoke Promod Mahajan, chairman of the parliamentary committee, into saying: "This is really a peculiar situation and reflects total confusion in the government. Either it should legitimize these operations and amend the Act, or it should decide that these planes be grounded and that only Indian Airlines should fly."

The four major players that emerged by mid-1993--Bombay-based East West, Jet Airways and Damania Airways and Delhi-based ModiLuft--quickly carved out a niche for themselves, taking traffic, pilots and engineers from Indian Airlines, the state-owned domestic carrier.

Worried Minister of Civil Aviation Ghulam Nabi Azad slapped restrictions on pilot and engineer recruitment from Indian, banned publication of timetables and forced the new airlines to fly an equal number of routes above and below 700 km. The purpose was to allow fair competition among all airlines and not put Indian at a disadvantage because it had to fly certain "social" routes.

Even so, Indian, beset as it was with wildcat strikes by its pilots and consequent disruption of schedules, continued to lose market share as well as money. So last August, Azad announced in Parliament that he was not going to preside over the liquidation of Indian Airlines, and thus, he was banning further import of 120-seat aircraft by the private airlines. …

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