India’s Aviation System Poised for Take-Off

India’s national aviation industry is set for a “relatively smooth” transition to a modern system under reforms planned by the Government, according to Mr Peter Harbison, Managing Director of the Centre for Asia Pacific Aviation. Mr Harbison told government and industry guests attending the CAPA Aviation Leaders’ Forum in New Delhi today that India’s aviation sector is “poised for take-off at the end of the runway”.

“There is a strong feeling among the aviation community that the long-standing potential of India’s aviation and tourism markets will this time finally be converted to reality,” Mr Harbison said in an address to the Forum.

However, he warned that failure to act on the current opportunities offered by the government’s reform programme, flowing from recommendations from the Naresh Chandra Committee, could have serious implications.

“India’s chance to convince its neighbours that this time there is a real intention, and the will, to move into the 21st century with its aviation strategy, will not come again quickly,” Mr Harbison said.

“Just to wait another year would risk a severe downgrading of India’s options as a world aviation power.”

About 100 invited guests drawn from the Indian Ministry of Aviation, Indian Ministry of Tourism, Directorate-General of Civil Aviation, Airports Authority of India, airline CEOs and international trade commissioners attended the event at The Grand Intercontinental Hotel.

India’s Minister of State for Civil Aviation (Independent Charge), Mr Rajiv Pratap Rudy, made a teleconference address to the Forum followed by the keynote address by the Chairman and Managing Director of Indian Airlines, Mr Sunil Arora. Other presentations were made by Gulf Air President & Chief Executive, Mr James Hogan, and the Managing Director of the Centre, Mr Peter Harbison This was followed by a panel discussion, where the presenters were joined by Mr.Wolfgang Prock-Schauer, CEO Jet Airways, Mr.U.K.Bose, CEO Air Sahara and Captain Gopinath, Chairman and Managing Director of Air Deccan. This panel brought together leaders from across the aviation spectrum, state-owned and private, domestic and international, full service and low cost. 

The Centre also presented an award as the Asia Pacific Aviation Minister of the Year 2003 to Mr Rudy who was unable to attend in person as scheduled, due to unavoidable circumstances in his constituency. Mr Hogan accepted the award for Gulf Air, for Asia Pacific Airline Turnaround of the Year 2003.

Mr Harbison discussed in his address the parallels between China’s restructuring of its aviation industry and the need for India to prepare for the challenges of the new aviation environment, including progressive liberalisation and the emergence of aggressive, low cost operators in the region.

“As a result of its expansion, China is now dominating the aviation agenda in east Asia. It will progressively and selectively offer more liberal access to its neighbours, causing others to seek similar liberalisation – or miss out on the attractive China growth,” he said.

“But, as recognised in the Chandra Committee report, India no longer has the luxury of time to go through China’s phased approach. 

“A multilateral agreement is being agreed between the US and the European Union, mergers will occur among high profile international airlines and all airlines are undergoing restructuring to compete in a new world.

“Global alliances are becoming more influential. Capital markets are wary of incumbent airlines. New low cost airlines are proliferating on India’s doorstep. The world is moving on.”

Mr Harbison said there is potentially “massive pent-up demand” for air travel in India. “With the benefit of hindsight, if Air India and Indian Airlines had been privatised ten years ago – as Australia’s government airlines were - India might well have a thriving domestic and international aviation industry today,” he said.

“They can still make the transition to major players, while new entry is encouraged. But if this current opportunity is missed, the reinvigoration process will be a mighty challenge.”