Gujral stands up

Gujral's acid reference to India's civil aviation policy may have been unpremeditated, and Kathmandu may not have been the most appropriate...

Gujral8217;s acid reference to India8217;s civil aviation policy may have been unpremeditated, and Kathmandu may not have been the most appropriate venue for a Prime Ministerial statement, but it has hit the nail on the head.

Without the free movement of goods, services, skills and people across borders, meaningful cooperation cannot even begin to get off the ground. Any number of MoUs may be signed and any number of protocol handshakes photo-opped, but their fruits cannot be realised if the skies are not free.

Today, a resident of Delhi finds it difficult to get to many Pakistani cities because Indian Airlines, in its wisdom, has sold its low-load slots to PIA. Pakistani visitors here have a similar problem. What this implies is that the comfort levels that Gujral and Nawaz Sharif have achieved may come to nothing because Indo-Pak trade will not pick up. Besides, in the era of Star alliances, how can the Indian carrier afford to go by an isolationist policy.

Worldwide, the days of independent international carriers is drawing to a close. Even KLM, one of the few pioneers of civil aviation which managed to survive on its own for decades, has tied up with Northwest. British Airways owns a quarter of Quantas and nearly 50 out of every 100 Francs spent by French domestic passengers come to its coffers. The national carriers of countries with very different aviation policies, like Kenya and Canada, are partly owned by overseas bodies. The business has always favoured the big fish.

Every time the skies are opened up, there is a rash of new operators, who were quickly shouldered off the runway. When the US market opened up, every other barnstormer went into business and there were close on 200 airlines.

Today, almost all of them are forgotten. The business is far more competitive and capital-intensive now. Economies of scale are of crucial importance, and they can be achieved only through close alliances that share everything, down to baggage coding. Restrictions on holdings may be in the interest of Air India8217;s sovereignty, but they would certainly not be in the national interest.

Now that Gujral has made his stance clear, he should follow it up by taking a hard look at how policy is made or unmade. Over the last year, the Civil Aviation Ministry has taken ministerial discretion to new heights, allegedly to subserve the national interest, and has managed to send out all the wrong signals with C. M. Ibrahim8217;s aviation policy. The manner in which Jet Airways8217; overseas partners Tailwinds was suddenly told it was operating in contravention of the law is extremely exceptionable. The damage cannot be undone now but the Tata-Singapore Airlines deal could certainly be re-evaluated. For the Bangalore airport project, a fresh tender can easily be floated with a clear, non-discretionary bidding process. If it is not financially viable, it can be shelved for the present, not scrapped altogether. The bottomline is that the Ministry needs to be discouraged from its continuing attempt to cut India off from the network of global services. Gujral has made his first statement worthy of a Prime Minister since he took office. Now, he must back it up with similarly decisive action.