Page 16 - AAA JANUARY- FEBRUARY 2013 Online Magazine

FEATURE INDIAN LOW COST CARRIERS

the Prime Minister’s approval. So most So while previous growth in the
observers do not expect any fuel tax or aviation sector hadn’t put it under much
price changes in any short time frame. stress, airport infrastructure simply
However, there have been more signs couldn’t cope with the unprecedented
of progress in the past six months than LCC growth between 2003 and 2007.
over the last 10 years, Somaia notes. “The terminals weren’t designed to
“If it is possible to reduce tax to 4% cope with that volume of traffic, so they
then it will have a dramatic impact on the were crowded and didn’t have enough
industry,” he says. “The tax collected on seats. On the airside, the airspace was
fuel is currently around US$600 to US$700 overcrowded and airports couldn’t
million annually, and this would represent schedule fast turnarounds,” he notes.
a major cost-saving for the airlines.” “Most LCCs turnaround in 25 to 30
Somaia adds, “Saving this money minutes, but it was not uncommon
will not quite bring them back to profit, that even after an hour in the air or
but will certainly go a long way.” sitting on the ground, they were still
waiting for a slot.”
Grounded So in late 2005, the government
But despite all the feverish activity in responded with an airport-modification
the air, things seem to be still working proposal costing an estimated US$10
at ox-cart pace on the ground. In fact, billion, to be implemented over five
until 2006, all Indian airports apart years. New greenfield airports were to
from Cochin airport were state-owned, be built at Hyderabad and Bangalore on
and with less than 1% of the population a public-private partnership (PPP) basis,
travelling by air, aviation was still seen while New Delhi and Mumbai were to
as a very elitist activity. receive upgrades, also PPP-funded. In
“India has had fairly socialist addition, the government undertook the
governments, and investing in aviation task of upgrading Chennai and Calcutta,
instead of education, health and poverty as well as 35 smaller, non-metropolitan
alleviation was not seen as the right airports.
thing to do,” says Somaia. “In 2003 a “From both a passenger and airline
Naresh Chandra committee concluded operating perspective, the results have
that ‘India’s airports were for the most been very good,” says Somaia. “While
part a major embarrassment.’” Mumbai is still a work in progress, the
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