Ground-level progress

Despite C.M. Ibrahim, the government has taken the first step towards a liberalised aviation policy. Opening up the airport development mar...

Despite C.M. Ibrahim, the government has taken the first step towards a liberalised aviation policy. Opening up the airport development market to all bodies will make for significantly increased capacities and safety levels, along with a significant decrement in the Aviation Minister8217;s capacity to do further damage. All this, apart from the enormous employment potential that is always generated at ground facilities. However, this is just the beginning.

The Gujral government8217;s commitment to reform will be tested in the winter session of Parliament, when the aviation policy will come up for clearance. The policy has been on the cards for so long that it has become a stale joke that refuses to end. It is time now for the Prime Minister to assert himself and prevent a situation where the direction taken by policy is dictated only by Ibrahim8217;s intransigence.

In April, the manner in which the Tata-SIA joint venture was killed by Ibrahim had raised suspicions that there was no consensus on an aviation policy within the United Front. The controversy over the Devanahalli airport project seemed to support the thesis. Then final confirmation came, oddly enough, from Kathmandu, where Gujral expressed his customary helplessness to force the adoption of a workable policy. After the induction of Jayanti Natarajan, however, he should be in a better position to advocate his point of view. In fact, Natarajan has said that air transport ought to be given the status of infrastructure. Were that to happen, the basic stance on policy-making would change. So far, Ibrahim has been able to justify his rather peculiar restrictions by insisting that they are needed to protect the holy cow of State-sector aviation, apart from the diffuse idea of national security. Looking at aviation as infrastructure, however, will invoke larger criteria of national interest.

Unfortunately for Ibrahim, there is no option but to regard aviation as infrastructure. Cheap, reliable and comfortable air travel is a great economic enabler. It permits people to be more responsive and flexible, and thereby makes them more productive. It enables the tourism sector to develop to full potential. And the resulting economies of scale enable airlines to operate as commercial enterprises that do not have to dip into the taxpayer8217;s pocket to keep their noses above water. Besides, in the era of Star alliances, when the airline industry worldwide is moving towards an oligopolistic system, attempts at retaining monopolies invite doom. Today, airlines are sharing coding regimes. Tomorrow, they may move towards the sharing of resources. In such a system, airlines which are inflexible and cannot conform to industry trends will be deemed unreliable partners.

If the Aviation Minister has his way, the Indian carriers will become disastrously uncompetitive, allegedly in the national interest. Now that the first step has been taken by opening up ground facilities, the debate is effectively over. By the time the aviation policy makes it to the Cabinet, airport liberalisation would have proved to be a success. And hopefully, C.M. Ibrahim will not have a leg to stand on with respect to the entry of foreign airline equity, or consultancy links with the private sector.