Growth ahead for Indian aviation

11th Oct 2005

The second annual Indian Subcontinent and Middle East Low Cost Airline Symposium concluded on 7 October in Mumbai, with all participants recognising the remarkable growth of the Indian market and the need for continued liberalisation of the sector.
Peter Harbison (pictured), Executive Chairman of the Centre for Asia Pacific Aviation, the symposium organiser, noted that the upbeat mood at the event reflected the growth prospects of the Subcontinent’s industry. “It was gratifying to see the sustained level of confidence in the Indian industry, especially in light of a backdrop of continuously rising fuel prices,” he noted.

While belief in the strong fundamentals of the sector was universally held, there were differences as to what the future would bring, as regards the specific shape the market - and the identities of its players.

There was unanimous support for the Indian government to limit its participation in the industry, both as a regulatory force and as a fellow competitor - but there were subtle differences in the reasons for this view.

Not surprisingly, several chief executives from privately-owned Indian carriers expressed frustration at the government’s continued officiating of an industry in which it is a lead investor and operator. But, while their protestations were born of self-interest, Mr Harbison offered a different view to support the need for reform.

“It is in the Indian Government’s own best interest to reform operations at [state-owned] Air India and Indian Airlines quickly, probably even merging them in the near future. With the recently enhanced access and route opportunities offered to private carriers, the state has unleashed forces that could well overtake its flag carriers if they don’t address their basic structures. They have a window of opportunity while the competition is still finding its feet, but that window won’t stay open long”, he said.




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