Ad Here  
The power-full Hindujas A Grand Finale for SN’s MS centenary at the US… TELANGANA at last…BUT London, London Narayan Naidu’s return augurs well for Seemandhra Tax agriculture A friendly business group The rise and fall of Annamalai University Fuel for thought Protest masters... Tribute Kudos to NDTV... Adharma of opposition politics B H Kothari - a tribute The Swadeshi Trump Welcome focus on core competence The brown list of Venkitaramanan Tihar, Puzhal not different from Parappana Agrahara IPL type auction for VCs? IPL - no surprise this scam Welcome thrust on trade in Modi’s foreign visits... Rs.1600 crore paper board plant of TNPL GM Technology at last! Lesson from Chandrababu Naidu How Air-India loses customs... Increasing non co-operation of state leaders New IT products of Ramco in the pipeline… More Shakthi to Das’ elbow Pharma – overdose of copying The balancing act When small is no larger beautiful.. Small units prefers to remain small... A Grand Finale for SN’s MS centenary at the US… The few handicaps... Land reclamation from sea appears cheaper! Recognition to role of NBFCs.... Delhi returns to BJP Measuring roof tops in terms of KW/MW Where is Rajaji? Welcome changes that testify to Jayalalithaa’s return to health Making ‘my Amaravati’... Bihar elections - the Rajaji formula worked Welcome GST Diamond jubilee of Egmore Samskrt School Adapt Vajpayee dinner diplomacy Fortune 500 review Tribute – UCAL Selvan… Permanent secretariat for TN GIM WTO Meet: resolved to meet again Telangana in top gear… Building loyalty through the stomach Delhi is distant… Eternal support for capitalisation of PS banks Vibrant Gujarat Modi storms Silicon Valley Modi and the lady Colour-Chem’s colourful KRVS Demise of a media baron... Why land prices zoom in TN? Towards speedy justice Mu Sigma – is no more Inflation: are we emulating Argentina and Brazil? China invests in India When online building permits work…. Put expensive assets created to use... Kinetic Karnataka Funding the un-funded No engine for this car Limit foreign borrowings to hi-tech, export potential projects... Moily’s bold thrust Infrastructure funding – lessons learnt Russi Mody – a tribute A more liberated TN… S Ramanathan – a versatile musician, musicologist A proud Madrasi The star of Spencers is no more TN-leverage strength of BHEL, NLC... The sea- saw battle continues... A glass full of corruption Parliament in paralysis... Bihar – Nitish Kumar adopts the Lalu model TN – agglomerate land holdings without alienating ownership EVM is tamper-proof Don’t seem to feel the pulse… The Jan Dhan bonanza Reliance’s TV – 18 ready to launch Tamil News Channel Convulsions in The Hindu GNS - 100: our first subscriber PC’s preference for professionals Editor's Says Quality education through the PPP mode Focus on quality of power - its only around 170-180V Kulandai was a giant Tatas moving out of urea production... Maximising the micro pricing … L&T- the specialty of special purpose vehicles Alexa – Talking Wikipedia Tough task taking states together Breaththrough in malaria control S V Raju – a ‘good’ true liberal A rich pool of talent not utilised…. Quality silica from Neyveli Shanti and Sadhana through Music Delhi is distant Shipping woes of Chennai companies Editor's Notes Auto components surge… Rahman at CIC Tribute – M V Murugappan Wanted: a second airport for Chennai R Sridhar steps down as CEO of Shriram Capital Banning booze... Revving up the manufacturing sector Tribute – Manikam Ramaswami L&T: focus on infrastructure and more infrastructure… Gas is the way forward The ‘Jayanthi Tax.’ MHC should not return to its old indisciplined ways Secularism and anti-Hinduism He continues the focus on social amelioration Noble nonagenarians... Come elections, come advertisements... Naidu will soon build a new Hyderabad CSR and CMI: promise of another Srinivasan Ramanujan... Chennai and Kolkata miss opportunity to grow as Delhi and Mumbai SoA @ 80 Road development slows down Padma Bhushan for A Ramakrishna Airlines in India: cost and space An informal presentation - analytical, forward locking... to the lack of interest on the part of these to focus on original research. This despite the much lower costs of such research in India. The industry which thrived on the protection of a closed economy and the advantage of a vast domestic market, has failed to organise its evolution on healthy lines Multi-faceted Venkat This scant respect for Law Nuclear power at the nucleus The Ports’ Pasha expands into Tamil Nadu An inexplicable neglect For whom the MIDS bell tolls? Fall in crude prices help in oil sector reform When TN politicians can emulate Kerala's Whistle-Stop Tour of Raghuram Rajan More heat than light Scientists urged to take up farmer-oriented research Music happens Varuna (rain) in 2015; Vaayu (air) in 2016. Chennai devastated A think tank for Chennai Readers' Mail No Maha Koottani in TN... Make standards certification mandatory... ONGC at KG Basin IAS invades NDDB... The why of tax incentives A professional at the helm of IRDA... TN accounts for the largest recruits by the IT sector Marketing expert Balagopal is no more CIPET hqrs to stay at Guindy – for the present? Online not in line with brick and mortar businesses... West Bengal: mindless malignancy For whom the bell tolls? A yen for wastage… TGS- The king storyteller Roaring Ro-Ro facility Things happen by accident and not by design... Like Hinduism: many paths to reach God... An enemy’s enemy is a friend F C Kohli - his concerns all embracing Wise Presidents Plummeting profits of PSBs Boy, can you beat these? Cement prices continue to rise… Godspeed, Chief Minister JJ Of course, Gujarat is vibrant EEC at the National Media Centre Fortune for Indian Airlines The nuclear option Valli, they are more marginalised Shaming of Tamils by Tamil farmers at Delhi When nations steal growth from one another… When the President was rendered homeless… Another Indian music maestro at the UN CII projects higher growth… TIAM turns a full cycle Tatas moving out of urea production... The rise and rise of KCP …and of a popular trade leader Why this malaise in medical education? Discoms deserve better… Engineering seats go abegging Computation of GDP – conundrums continue Sri Lanka votes for change Air Asia India will set new benchmarks for budget travel Contrarian cousins Insurance companies bleeding, yet no decision on increasing FDI limit! Medical costs hit the roof... Cutting the nose to spite the face Strengthen the base... A welcome initiative by the judiciary Poor quality of university VCs Waning interest in public discussions… Build close rapport with business leaders No mega rail project for Tamil Nadu Where a state respects its litterateurs… Silver Years of Madras Musings Solar, solar everywhere … Which side are you, Montek? Muffled voices for merit… All eyes on Sankara Nethralaya Sweeter prospects for sugar More tributes to GR Poor representation for Kerala and TN in Cabinet Solar thermal shines… Delhi Chalo... Remembering Indira Sivasailam... The Gulf aviation boom Odisha: spectacular win by Naveen Patnaik When Ratan Tata visited SRM Shale gas and its shallow future Dr C Rangarajan returns to Chennai Five star activism stalls development activity Robber barons everywhere Liberal imports idling indigenous capacities Intellectual of rare qualities There was flood of milk. Reason: no milk commissioner! Should we change the official year? Haul over the coal Paytm karo... More Shakti to resource mobilisation... Mersal magnified Preserving for the future Excel Generators provide the vital back-up A C Muthiah – his munificent bequeaths to science Return to king coal for urea... Sweet news for TN sugar mills Lalu’s envy, India’s pride Align crops to agro climate endowments… Not just in-laws (and outlaws); they’ve renowned academics at the helm! PPP mode for upgrading Corporation Hospitals Revive development banks... CRS, a jewel among managers, is no more. The ‘Ayyo-yes’ is no more Gay abandon in pricing He saved millions from starvation... Streamlining mandatory third party cover Polls and promises Cleaning Ganga – relocate tanneries and install electric crematoria
Fortune for Indian Airlines

In the 1950s and 1960s, several countries in Asia and Africa were gaining independence. The first things these countries did were  (a)  invent a flag (b) decide on a national anthem and (c) establish a national airline. But setting an airline and efficiently managing it required both resources and management skills.

The Gulf countries witnessed a huge surge in their incomes post the 1971 oil crisis. Most of these countries are small with little natural resources, except oil. With their sparse population, managing big business was an additional problem. With the oil prices zooming, several of these thought the civil aviation sector, employing manpower from across the globe, can be a lucrative business. Several oil-rich countries set up their airlines in quick succession.

Saudi Arabia, the largest producer of oil and Kuwait were among the earliest. In subsequent years, one witnessed several airline companies established in the Gulf region – Emirates, Gulf Air, Etihad Airlines... These countries also built modern airports. Dubai emerged among the largest of these and competed with the likes of Singapore and Hong Kong. The Gulf airlines, buoyed by oil wealth, went for a large fleet of modern aircraft. Emirates was one of the earliest to go for Airbus 380 aircraft, the largest in operation.

The location of the Gulf, en route to Europe and the US, was a significant advantage. Airlines in the Gulf attracted customers from India, used their home base as their hubs and offered non-stop flights to Europe, the US and other far off places and compete with the established airlines in Europe. In this, they found the large Indian air travel population an extremely attractive target for custom. The sloppy performance of India’s cash-starved national carrier Air India coincided with the surge in air travel from India, and these became great opportunities for the Gulf carriers. Through hubs like Dubai, Abu Dhabi, and Doha, these Gulf airlines offered convenient and often shorter duration flights to the US. Etihad Airlines went one step further in establishing the US immigration and customs department at Abu Dhabi. This helps complete formalities of immigration and customs in the transit time and enable passengers to arrive at US airports as domestic travellers.

The traditional hubs in Europe, Frankfurt for Lufthansa, Heathrow for British Airways or Charles de Gaulle for Air France, have been rapidly losing custom to these airports in the Gulf. These Gulf airlines also offer airfares at extremely competitive rates. Thus, the boom enjoyed earlier by the European airlines has substantially declined giving space to these airlines from the Gulf.

In India, a corresponding change is not taking place at an equal pace. Air India continues to operate international flights from the Mumbai and Delhi hubs. This means passengers from other cities are aggregated in these two hubs. For long, there has been a demand for Air India offering direct flights from the south, but it has not taken place. Two decades ago, Lufthansa started offering direct flights from Chennai, then extended these from Bengaluru and Hyderabad to Frankfurt and then to dozens of destinations in America, Europe, Africa and elsewhere. Private airlines like Jet Airways and later Kingfisher held promise of expanding its destinations to Europe, the US and other places. Again these were constrained by their resources needed for large-scale acquisition of aircraft and for maintaining and improving the services. Kingfisher crashed out.

Jet Airways joined hands with Etihad as an equity partner and has been able to increase its custom for foreign travel. IndiGo and SpiceJet thrive on local custom.  Tatas entered with a lot of promise, simultaneously setting up two airlines – one a joint venture collaboration with Singapore Airlines and the other with the budget airline AirAsia of Malaysia. These are in the process of getting licenses to fly abroad after the recent amendment to the 5/20 rule, which stipulated a minimum of five years’ experience in operation and at least 20 aircrafts.

Indian companies need much larger resources to benefit from the massive increase in the number of air travellers.

The new aviation policy provides exciting prospects to trigger entry of more operators in the Indian aviation sector.

Author :
Reported On :
Sector :
Shoulder :
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
S-15, Industrial Estate,
Chennai - 600 032.
PHONE: +91 44 22501236