AAI for AAI

Air travellers can be forgiven for not wondering about arcane policy issues when confronted with the various degrees of decay that Indian ai...

Air travellers can be forgiven for not wondering about arcane policy issues when confronted with the various degrees of decay that Indian airports showcase. But somewhere between the unimpressive facade and the uninteresting sandwiches, lies a fairly shocking fact: one organisation8212;the Airports Authority of India AAI8212;runs airports, makes policy concerning them and pronounces them worthy or unworthy. Such judge-jury-executioner roles were once reserved for DoT in telecom. But that was deep in the pre-reform past. That airports are still run by the rules of the ancien regime shows again what little reform8212;apart from allowing private operators8212;has happened in civil aviation. That this regime may change thanks to foreign pressure8212;the International Civil Aviation Organisation has been pressing the case for years8212;is even more revealing of the policy mindset.

Still, it8217;s a relief the job of regulating airports, via issuing licences at the initial stage, may finally be taken away from AAI and given to the Directorate General of Civil Aviation DGCA. DGCA8217;s first job will be to address basic infrastructural and safety parameters that seem to have been unsurprisingly ignored while AAI monitored AAI. But the government must not consider its own job done once the DGCA finishes that task. Most western countries have airport regulators who are independent and professionally run. Is DGCA either?

Some of the issues an airport regulator may have to deal with in the near future can be quite complex. For example, airports that serve as the exclusive air transport gateway to their catchment area will be a natural monopoly. Unchecked, this monopoly power can be abused through high prices, discriminatory terms to certain customers and other anti-competitive practices. The demands that such a remit will put on the composition of an airport regulator must be accepted from the beginning. One regulator who, upon inception, escaped the government8217;s characteristically heavy embrace is TRAI. It is no coincidence that after DoT lost its monitoring functions and TRAI was allowed to work relatively independently, tariffs came down, services expanded and a revolution happened in Indian mobile telephony. Air traffic is at the cusp of such a change, as even a cursory look at passenger figures will show. Get a good regulator and even the sandwiches may get better.