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The idea is very simple, today Emirates, Eithaad et al have a very unfair advantage where they use their low tax bases and subsidized fuel to unfairly compete. They are also using thier Airports as HUB airports and not letting our airports grow.
Why is it that these people (foreign carriers) have been able to reach where they have reached? They could do that because they looked at destinations beyond metro cities and started operating. They are working in their interest, let's work in our interest. We need to identify four, six or eight hubs based on our geography. The international carriers will be able to operate only out of these hub airports but Indian carriers will be allowed to operate out of any international airport," Raju said.
In the past it would have meant Air India which would have a disaster, but now Indigo etc. will give equally good service to Indians going to Gulf from Kerala etc.
The 6 Metro thingie is because, these airports are aldready at capacity while Indian airlines catch up we don't violate any of our treaties.
Why cant Emirates, Ethihaad close down Maintenance depots in Dubai and Abu Dhabi and move them to India. While at it fire those Pakis and suspend all flights to Pak land till they withdraw from POK.
Nope, All existing flights still stay, so Emirates, Ethihad etc will still fly from Dubai and Abu Dhabi to Kerala, additional flights will come from India Registered Airlines like Indigo, Vistara, Jet etc. UPA somehow forgot that India Registered Airlines should get reciprocity for these flights.
No need to go old Air India system of flying to Mumbai and then train flight.
For Blue collar workers, many companies used to pay for the flight only from Mumbai
Though it sounds fine for Gelf only traffic, if you are flying to Europe or the states, I doubt if Indigo, Jet , Vistara are going to be able to give smooth transits with less than 24 hrs net travel time to tier-2 locations. As of now flying Jet to Kerala is like inviting yourself for a 32 to 48 h travel time with exorbitant prices.
It all depends on the hub location, with Jet or future Indigo/Vistara it will be 2 hop not a single hop as the hubs are going to be in Mumbai or Delhi.
GoI is undoing years of favoritism towards the Gelf airlines with this action. Those carriers became our de facto flag carriers, because GoI kneecapped AI and the domestic airlines, with the 5-year to phoren flights rule.
The 'purely bilateral' suggest works when two equal parties are involved. That's not the case here. Yummyrates has turned into an 800lb gorilla, fed significantly by subcontinental traffic. They use their money power to get the planes, the management and technology to run their DXB hub system. In the process they're eating everyone else's lunch.
If GoI wants to fix this problem, there are several necessary steps they need to take:
* Encourage the domestic aviation sector, including through protectionism.
* India to Gelf hubs to be fed by Indian carriers. Gelf airlines buy codeshare seats on our carriers.
* No hubbing by Gelf carriers at DXB for Indian 2nd tier cities; *we* use DXB as a hub to feed 2nd tier to DXB traffic, or improve DEL/BOM transit such that Gelf can be skipped.
* Constrain Gelf carriers on their 1st tier hub flights via slot timings, giving better ones to Indian carriers.
Thanks to years of UPA mismanagement, Yummyrates et al have been able to have their cake and eat it too. I would not be surprised if GoI progressively ensures all of the above, or has already started doing so behind the scenes. Just one piece of news is not the complete picture.
The problem is that the new private domestic carriers don't seem to be interested in overseas routes. Jet is the only one with international routes after Kingfisher folded, and they don't seem to be in a hurry to expand. SpiceJet is in doldrums and may close soon. AirAsia is just starting. GoAir has remained small and has ordered only A320s. Indigo is the big dada of private carriers but even its substantial new orders are only for A320s. There are no orders for larger, long range aircraft from Indian carriers except for a few from Jet and Air India.
Overseas does not have to mean transcontinentals. ME-India is a very potent overseas route that private airlines can sell codeshare seats to Gelf airlines. Yummyrates at all can run their onward flights to EU/US themselves. Controlling traffic into and out of the country using ones own airlines benefits the domestic aviation sector. Ideally we'd bypass the Gelf hubs altogether, and operate a seamless hub operations out of DEL/BOM , but until then, the above policies let us take advantage of their investments in their hubs.
There's no value proposition in long range widebodies for them if GoI does not support them. Jet tried, but decided it was better to feed Etihad at Abu Dhabi, rather than be hamstrung trying to operate a hub at DEL/BOM when the Civil Aviation Ministry seemed more intent on giving away the market to the Gelf carriers on a platter. They therefore did the smart thing of focussing on feeding Etihad at Abu Dhabi, enabling them to maintain their share of the pie.
The latest GoI missive just supports what Jet did; compelling the Gelf carriers to use Indian airlines to feed their hubs from 2nd tier airports. Simultaneously GoI will restrict their frequency and capacity, compelling more of the seats onto Indian carriers. That way, if the Gelf carriers want to continue making money in India, they'll necessarily have to fatten our carriers as well. Otherwise they lose out on a significant amount of connecting traffic to EU/US.
No one has any issues with Singapore Air or Cathay Pacific ruling the western route or the eastern routes from an Indian perspective while pillorying ME ones.
Bade, that is a strawman. Applies to all carriers who depend on Indian market to feed their hubs. GoI's notice restricts foreign carriers, which affects SQ too, since they fly to Cochin and Thiruvananthapuram, as well as Coimbatore and Vizag. They will lose those. Cathay does not fly to 2nd tier cities.
I thought Air Asia flies to tier-2 places like Trichy etc at rock bottom prices, so must be eating into the profits of Indian origin airlines too on that sector.
Soo.. the gurus are saying that I, as a fare and tax paying passenger should pay more in time and money, so that the so called "domestic airlines" can prosper! Great!!
Counter arguments:
1. If UPA screwed up, screwing the tier-2 folks is not the solution. Do the protectionism equally around!! The only thing I oppose is the "Metros onlee" policy.
2. What is the total % ownership of these so called "domestic" carriers vested with foreign origin? Why call them "domestic"?
3. From the service economy PoV, only aircraft servicing is done abroad. All other services, including ground, logistics, hospitality etc are done locally. What % of the total expense is aircraft service done abroad. compared to the services procured locally?
4. Fuel price difference? You tend to forget that planes do not fill up for return journey like cars do. Foreign carriers must buy fuel from here at the local prices!!
I will tell you what! The local carriers will not improve if you "protect" them. The Indian mentality is to be "spoilt brats". More you protect, the ore they will become lazy. So you honestly think that the airlines will give good service out of, say COK, if there is no foreign carrier breathing down their necks?
What we need is to scrap the 5/20 rule and make the playing field level. Give some incentives if you want, but do not do things at the cost of the passengers. We had been getting good service from the gulf and SEA airlines, and I owe NOTHING to the so called "domestic airlines" to forgo that!!
^^I think what Suraj is saying is that till now, the playing field was tilted in the other direction - in favor of the foreign carriers - due to stupid GoI rules. That is much worse than trying to protect domestic carriers. The new rules are to tilt the balance in favor of domestic carriers slightly.
Your fear that you will have to shell out more money because of this is unfounded. Current routes to tier 2 cities are not being removed. Only new ones are going to be restricted to domestic carriers, while foreign carriers can get new routes only to metros.
Dileep: there's no relationship between what GoI's ruling states and fares. Fares depend on what the market can absorb. If they can make you shell out more, they will. They = Indian or foreign carriers. Arguably, GoI has more control over fares imposed by Indian carriers.
What exists now:
* DXB and AUH are YummyRates and YetiHad hubs.
* They fly to Indian spokes to feed those two hubs, and there onwards.
* Little net gain to India, gain to UAE.
* No price control over market. They can and will provide teaser low fares to gain monopoly and then jack up rates.
What GoI wants to do:
* Indian carriers dominate India<->DXB/AUH, feeds continual traffic.
* Yummyrates/Yetihad buys codeshare capacity through agreements or stakeholding in domestic carriers.
* Indian carriers register cash flow gains from reliable O/D and hub traffic between DXB/AUH and India.
* GoI invests gains to strengthen DEL/BOM as hubs, squeeze out DXB/AUH out of market.
Like it or not, GoI has a mandate to foster the domestic aviation industry. They may be lazy or spoilt or whatever, but GoI has a mandate still. They can sit back and let the foreign carriers corner the market like UPA did, or they can make a good faith effort to fix it in our favor, as is happening now. Not every step will be above criticism, but these gains will not come painlessly.
Current traffic does not indicate future trends, no ? Tier-2 places like Kochi as an example is already seeing increasing traffic. If GoK does it bit with infra, then even the tourist traffic will increase by much more than what we see now. All this has to be funneled in somehow. Most tourists are not Gulf Sheikhs and are for most parts from Europe if not US. As the demand increases for one-hop flights into say KL, prices go up only if people want to avoid the hassle of flying to BOM/DEL.
Bad policy of previous govt is just a bugbear, these domestic airlines did not find it in themselves to provide for proper connectivity from BOM/DEL to tier-2 towns for decades. Having suffered long overnight waits and hotel stays at the last hop in, some of us are not going to trust these domestic carriers to do the right thing for transit passengers. What stopped them from providing late night or early morning connectivity all these years. I am at least thankful to AI to have done the right thing and provide seamless connectivity to tier-2 towns all these years, the sole reason they rank high in my book for travel comfort.
Sorry, I am not impressed by Jet and the now dead KF, among the big domestic players. Jet is great for domestic flights, but then Indigo does that even better IMO.
Fares are not dependent merely on demand. The monopoly levels of the carriers as a part in it. Any new carrier trying to corner the market, backed by an efficient hub elsewhere, will continuously keep prices low to send its competition out of business, whereupon it will raise fares. That's what Yummyrates does.
Past experiences with private carriers should be viewed as past experience with bad GoI policy. GoI simply abdicated from its responsibility to foster the domestic aviation sector, and instead handed the market to UAE carriers. It would be no surprise if significant $$ changed hands in the process.
Fixing it will require many steps, including the one where GoI squeezes the UAE carriers out of the India-UAE market, and forces them to codeshare with Indian carriers, so that the money flows into India too. That is a business imperative on our part. If the Indian carrier does a bad job of it, they'll lose marketshare. If they do it as well or better than Yummyrates/Yetihad did, they'll grow stronger on the back of the free feed from the efficient AUH/DXB hubs. Those two carriers spent years gaining at our expense. It's about time we gained through their hub operations too.
I dunno about Emirates fares, but I have seen Qatar fares go down significantly over the years. It is sub $900 r/t during off season this year reflecting the low oil prices perhaps.
You keep hearing about Airlines business being not so profitable, except for the low-cost carriers (e.g. Southwest in the US). Then one who controls the spigot for fuel prices is the only one going to be able to sustain world wide operations for long.
1. There is no "Indian Carrier" except AI. All other are "Half Indian" carriers. NRI money in this field for all practical purposes is not really Indian.
2. Yes, UPA "killed the cow", that doesn't mean NDA should "kill the calf" in response.
3. I have no love for the "Indian Carriers" or BOM/DEL. Both have screwed me enough in the pre-liberalization years. This is purely business onlee.
4. As a passenger, EK/EY/MI/AK gives me great service and VFM. That is what counts for me. I choose carriers on VFM alone, so it is upto the "Indian Carriers" to entice me for my business.
5. The impact upon economy is very little in fact. "Sheikhs taking money" is just fearmongering. If I compare the % of my ticket money getting into Indian economy and outside of it for the foreign v/s Indian carriers, the difference is very little.
Let me repeat. I consider the proposed "Metros Onlee" policy hurting me as a passenger from a Tier-2 city. I consider it discriminatory. I don't care what the govt brings in across the board in the country. Just don't ask me to "take one for the team" simply because I am from a Tier-2 city.
What next? Luxury cars to be sold only in Metros? Because these furriners have made a lot of money from Mallustan?
Dileep: from a personal viewpoint I've as much to lose as you do if Indian carriers cannot maintain the sort of hub feed to Singapore, Doobai or Abu Dubby that EY and EH do now. You work probably down the street from where my parents' house is. As for 'Indian carriers' I'm simply designating them in the manner GoI does for the purpose of the article, rather than add another variable into the discussion.
Considering that AI-X gets most of the Kerala-Gelf traffic, they stand to benefit from GoI's policies most, compelling EH/EY to buy codeshare capacity on them, gaining AI more revenues.
Like I said, trying to replace EH/EY with Indian carriers is one of several tasks in GoI's hand to build the domestic aviation industry further. If they do it well, Indian passengers and the domestic aviation sector both benefit. If they don't things are back to where it was.
Luxury cars are an unrelated matter. Restricting access to some or all airports is part of aviation policymaking all over the world.
Suraj wrote:Restricting access to some or all airports is part of aviation policymaking all over the world.
So what do you propose? If its like relating opening up a city in India to an opening up a city in a country, then flying to singapore, kulalampur can only be done thru Chennai. All Gelf locations thru Mumbai and All Europe locations thru ND. That doesnt look like liberlization, would say cartelization
Actually, when a bilateral is done, both countries will get equal amount of seats, there is no discrimination. The problem is that AirIndia hogs all the seats and release only little to other private parties. The seat division has to be done thru an agreeable formula which can be sustained. Then private carriers will have better level playing field. In the bilateral instead of airport opening up, nowadays routes are mentioned so that carriers from each country will get equal number of routes
yes 5/20 rule should go, but I dont support the "metro" thingee. The argument that other countries doesn't have the same is also faulty. US has more international airports than India, it doesn't stop anyone landing other than in "metro"
At some point these countries will quite likely impose a restrictive arrangement to curtail further expansion of the Gelf carriers into their markets. There's past precedent in their behavior. We're simply doing the same here, renegotiating an existing arrangement to accord terms that better suit us.
Other bilaterals involving India already have airport restrictions, as far as I know. Cathay, for example, can only fly to N airports in India (5 or 6, I think). They cannot add more destinations without giving up existing services. From what I see here, GoI is simply targeting the Gelf airlines with similar restrictions to compel them to codeshare on an Indian carrier for Gelf-India traffic.
Is all this discriminatory in any particular way ? Sure. All bilaterals have that factor built in, and it depends on the relative dynamics of the bilateral. Because we accord some right in bilateral A doesn't mean we'll do the same in another .
We have a vested interest in making sure Indian carriers get a disproportionate advantage in flying to/from Indian airports compared to foreign ones in order to maintain and improve the general health of civil aviation in India. This is not the same as protectionism of Indian auto manufacturers before the 1990's for e.g. Here it is Indian consumers who eventually stand to benefit if Indian carriers thrive because foreign carriers are never going to fly domestic routes inside India. The domestic carriers who do, have fallen on hard times, and if they keep collapsing like Kingfisher did and Spicejet might very soon, it is us who'll have to deal with high ticket prices on domestic routes. Doing an equal-equal between domestic and foreign carriers (even on the basis of who owns them) is ill-advised IMHO.
Simply put, it is far more important to have several viable Indian carriers who compete and keep domestic prices low even if it means discriminating against foreign carriers leading to a (possible) rise in ticket prices to the Gulf and US.
Last edited by nachiket on 27 Nov 2014 00:22, edited 1 time in total.
India needs to create Mumbai and Delhi hubs. Some of the issues adressed.
1 Domestic transit. Make it possible to check in just after exit.
2 Have efficient shuttle buses to and from internatioal terminals.
3 create day rest rooms. After taking long flights, it can be nice to relax in a hotel like room. Provide reasonable rooms where one can stay for and rest for a few hours. Take a shower etc. Create this in domestic terminals.
Mumbai and Delhi airports are pretty nice and there is plenty of place to expand for hotels etc.
Why bother when one can actually fly directly to tier-2 cities with equally good airports and be home sooner. All Intl airports should be treated at par. Delhi and Mumbai get enough traffic to pull up their airport related economies, without having to dip into other pockets. They do not care much about transit passengers. If they did things would have improved decades ago. Blaming policy formulation and now discrimination against smaller cities goes against the grain of better consumer service. We are told consumers can shove it till some private entities can make profits and make it all look and feel good.
KF chief was on record saying what killed his business was the fuel pricing. That seems to be the fundamental factor which drives profit and ability to hold on during difficult times, or huge state sponsored write-offs like AI gets.
I was just discussing the Hajj Subsidy on another forum. My question was from where the funds for the Subsidy taken out. Was it from a special fund where other Muslims would have contributed as Zakath, or was it from the general tax-payers money. A sensible member said that the money was from the tax collected by GoI, but added on that it was NOT even required. Even Muslim organisations have demanded that this subsidy be removed, as Hajj is generally not performed by taking money from others.
He had another point to make. The subsidy was given because of the following reasons:-
1. Air India was the only agency which was allowed by GoI to take Hajj pilgrims.
2. Air India (with tacit GoI approval perhaps) jacked up the fares for such flights to very exorbitant levels. As per the other member, a ticket which costs INR 15,000/- is jacked upto INR 40,000/- and higher.
3. GoI then provides a subsidy where the Hajj pilgrim pays up Rs.15,000/-, but the balance in the jacked up price is paid by GoI to Air India. So it was GoI and AI which is playing a dirty game, by using Hajj pilgrimage as a revenue generation scheme for AI alone.
Is there truth in this? Why should GoI ever try these cheap tricks? Another side effect of this is that Muslims would routinely get accused of being free-loaders who make their religious trips at tax payers expense.
Sachin, it's a similar scam favouring Air P'site in case of LTC granted to govt servants. to avail it you have to buy LTC-80 tickets only, which costs 3 times as much as the regular ones !!
^ Yeah that is another nonsense , beauty of it is you have to travel AI even if likes of Indigo or even Jet airways have better connections and lower fare. GOI should outsource the LTC part to some third party claims will be faster , government will save money and most importantly government employees will get better service and more flexibility.
The ideal scenario would be to develop a large, new hub possibly co-located with a new city. Maybe gift city or near a major tourist destination (Khajuraho, Jaipur, Hampi ...)? I think we need to think big and aim to service pan Asian traffic from this hub. Could carve out a quasi Union Territory if the states can't handle it. This would be a hub handling 777ER/A380 type traffic nonstop from every major metro in the world except those in South America. Something fitting for the new centre of gravity of the world's growth. Shanghai is an example. DEL is there of course but somewhat far from the centroid of India and even today not as cosmopolitan as BOM. Same thing for BLR.
However BOM can't do anything given one runway, transportation issues and lack of access to local tourism. Ancient Buddhist and Hindu structures are used as public toilets there (don't believe me - go to mahakali caves near SEEPZ). That city is past its prime, Metro projects notwithstanding.
In the US, DTW comes to mind as an example. It used to be fairly modest but has morphed into a large and arguably best run North American hub. Great vision and execution. Of course the Delta partnership made a big difference, but that's part of the plan.
but are etihad and emirates ordering the 100s of heavies and building massive terminals on a operating +ve cash flow/profit basis ? surely not. the shiekhs are working to a plan to get rid of the europeans and qantas from the europe-bound and america-bound market. in east asia several strong airlines exist but they are popularizing the polar route to NA as a alternative to traditional route via east asia to NA west coast. with polar route, the times to any latitude from dubai -> NA are about the same. diff between boston and orlando is likely only 3 hrs.
so who is going to pay the tab keep pouring money into such a indian state funded champion? the tab will be like $10 for a new T4 and surely $25b over 10 yrs to build a fleet of heavies and keep replacing them every 3 yrs.
Yes DEL does make sense. In your opinion what benefit does Dubai get from doing this. They don't have much oil. It's basically a financial centre/tax haven for individuals/laundry for money and goods, correct?
Well they get all Indian Leaders family, Govt babus etc all having to travel to Dubai to Europe NA. Thus dependency and influence, and a whole host countries. Once they have a Monopolistic situation, they will start dictating terms.
Right, but they are not funding Emirates with oil, which is what one might assume. Per Wikipedia oil is only 5% of their economy. They are making money as a financial centre and a port and recycling some of that towards gaining a monopolistic advantage. Cochin (or Colombo) are well positioned for something like that, are they not?
Abu Dhabi may be different but they have their own airline that competes with Emirates.
I may be absolutely wrong but I think I just saw an aircraft that looks suspiciously like the Saras in the air around bellandur a minute ago. Any jingoes in that area able to corroborate? It wasnt in primer yellow, was definitely twin engined mounted in the rear and high tailed. Sounded like a turbo prop. Couldn't make out if it was a pusher prop though.
Come March, you may get to fly abroad from city (Chandigarh)
Deepankar Sharda
Tribune News Service
Chandigarh, November 30
Paving the way for the operation of international flights from the Chandigarh airport, the Ministry of Defence (MoD) and the Indian Air Force have initiated the process of increasing the strength of the operations staff here.
Increasing the staff strength would mean extended watch hours of the air traffic controller. International flights are likely to begin from the city by March 2015.
Sources in the MoD and the IAF said the watch hours at the airport would only be extended after getting additional ground staff to manage the air traffic controller, communication radars, weather stations, airfield lighting and safety vehicles.
The sources said the matter was pending with the finance wing of the MoD and was likely to be cleared soon.
The Union Civil Aviation Ministry has asked the MoD to extend the flying operations at Chandigarh. The IAF has given its nod for it. "In case the sanction does not come from the MoD, the IAF will be asked to study the possibility of pulling out men from other bases to do the needful,” said the sources.
At present, the IAF performs 18 hours of operations 15 days a month while during the remaining 15 days, the number of hours is reduced.
The civil flights operate within a time span of 12 hours, from 7 am to 7 pm. In case of a favourable decision, the base will operate 18 hours every day or round the clock. The time span of the civil flights will be extended to 11 pm or till midnight.
The IAF uses the Chandigarh base to send supplies to Ladakh and for its other operations that start early morning. “Extending operations for 18 hours daily is possible and the matter is being studied. The demand to allow civil flights till 10.30 pm is welcome,” said an officer.
* Ready for international operations, says airport director
“We are ready for international operations. However, we have not received any confirmation from airlines. Only SpiceJet has initiated a move for a Chandigarh-Dubai flight from March 2015 and we have given our consent for it. Other airlines have been asked to submit a list of their desired destinations by the end of this year,” said JS Balhara, director of the Chandigarh airport.
* Airlines reluctant on starting international flights?
Airlines are thinking twice before announcing any new venture from the Chandigarh airport. Their main dilemma is whether they will be able to make any profits from here or not. Apart from SpiceJet, which has announced to start a Chandigarh-Dubai flight, no other airline has made any such announcement. Officials of several airlines said they were yet to decide on starting international flights from the city.
Rahul M wrote:Sachin, it's a similar scam favouring Air P'site in case of LTC granted to govt servants. to avail it you have to buy LTC-80 tickets only, which costs 3 times as much as the regular ones !!
DXB is investing $25 Billion to build a green field, next gen airport. The flight routes/destinations for Emirates is growing longer, I think they now connect Dubai to almost all the major cities of the world in one hop.
you mean another airport on top of the gigantic one they already have?
it is true they surely have the most long haul routes in the world and the biggest fleet of 777 and 380. soon they will dwarf erstwhile giants like lufthansa, BA and SIA.
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Sheikh Mohammed bin Rashid Al Maktoum approved a $32 billion plan to continue development of the eponymous Al Maktoum International Airport at Dubai World Central. The airport opened its doors to passengers last year but will be beefed up to ultimately accommodate over 200 million passengers per year and 12 million tons of cargo. The first phase will include the construction of two new satellite buildings with a capacity of 120 million passengers annually and the ability to host 100 Airbus A380 aircraft at any one time. http://www.cnn.com/2014/09/09/travel/du ... xpanasion/
