Looking back at the death of aviation
Jul 04 2013
Scientists at Nasa concur that Concorde was a bigger challenge for mankind than putting a man on the moon. Regular clientele aboard the finest and fastest passenger airplane ever made included the Queen of Jordan, Sting, Mick Jagger, Princess Diana and Queen Elizabeth. It may have been hard for Great Britain to digest the certainty that the last great reminder of them being a force to reckon with was gone. Four of the passengers who clamoured to get on to Concorde’s last flight had re-mortgaged their houses and sold all their furniture, to be able to afford the expensive tickets, only to realise they had arrived at Heathrow without their passports.
But this heart-rending story wasn’t as miserable as the end of an icon. For nearly three decades, it flew back and forth over the Atlantic in three hours on a one-way journey, never putting a foot wrong and suddenly one day, nobody came to clean its carpets or replenish its fuel tanks. Why? Because it was deemed too unsafe, expensive and environmentally unfriendly. The latter two being critical concerns because it burned twice the amount fuel as a 747 did. But Concorde didn’t understand business or money. It was built for one thing only; to fly very, very fast over the Atlantic. It had a soul, a personality, which was much more than a combination of metal, rubber and electronics. Having grown up playing with scale models of this airplane, its death, thanks to a few businessmen, was hard to stomach, crushing every hope I had to be able fly in it one day.
The Indian aviation industry is one of the greatest in the world. Except that it isn’t. In all honesty, it’s fairly rubbish and is pretty much headed in the direction of the Concorde.
In this country of colossal contrasts, where tall claims are incessantly made of us being the next superpower, an individual needs 43 licences to open an alcohol-serving restaurant. One cannot begin to fathom what it would be like to start an airline. In the past five years, Indian aviation has been in a continuous state of decay. Budget carriers were initially buoyed by India’s stellar GDP growth and a constantly growing middle class, but have now reduced themselves to luxury items, only affordable by the affluent few.
One would fancy usage of the word ‘decimated’ for the beer manufacturer, Formula 1 team owner’s airline, whereas our national carrier, the very-broke and inappropriately nicknamed maharaja is in a state of abject mockery. The unwise merger of Air India and Indian Airlines, shoddy management and bureaucracy have helped Air India rake up a debt of Rs 44,000 crore. One would expect an engineer to know how many zeros that number has, but honestly, I don’t. I only know that figure can purchase many African nations or, perhaps, make the earth spin in another direction.
So what, you may wonder, is wrong with Indian aviation? The key issue is the aviation policy or the lack thereof. The cost of operations is exorbitant, with aviation fuel constituting 50 per cent of the expenditure and the gigantic weakening of the rupee has shot up the purchase price of fuel. The government’s decision to allow airlines to import their own fuel would seem like a welcome measure, but it decides to impose an import duty of 32 per cent eventually making domestic airlines shell out nearly 50 per cent more than the average global price.
Import duties, anywhere in the world, are levied to deter companies from importing and to promote manufacturing within their own country. The price of aviation fuel in India is based on international import parity prices, and do not relate to the actual cost of producing it in India. It would seem then that this form of indirect tax is simply the permission granted by the government to do business and a source of income that the state is unwilling to let go off. It clearly indicates the woeful condition of our government, which is unable to regularly discover new means of trade and business, and instead solely relies on pecuniary burden imposed on its citizens as a means of income. The lack of regulation at major airports in India has enabled private developers to siphon from travellers, a passenger service and airport development fee. On a return journey from Mumbai to Delhi, where the cost of the total ticket is Rs 11,000, you are paying around Rs 1,900 simply for showing up and getting to the plane. 17 per cent of your money on each ticket is helping to build the airport. The numbers adding up, without any surprises, are dizzying.
Of course, there is careless management and poor business design that is affecting several carriers in India, but indirect taxation or the permission-to-live price is the actual dilemma. In fact, even in the general marketplace, one cannot find a single item, to which a number of these taxes are not attached, and you are under obligation to either pay them or go without; and since going without amounts to depriving yourself from life itself, you pay.
India had a golden opportunity to be a powerhouse in the aviation industry when the sector was liberalised in 2003. Unfortunately, the lack of regulations, punitive taxes and poor fiscal management paint a telling picture that it is close to imploding and will eventually be a Concorde story if our government isn’t agile enough.
Easy to notice that countries like India, which show great potential in the business plans of leading airplane manufacturers, are eventually contributors to a stage where these same companies are cowering for cover, looking to shut shop.
Also, I do know how to make the earth spin in another direction, so anybody with a spare
Rs 44,000 crore, please.
(The writer is the founderhead of Nilima Nanotechnologies)