WHEN INDIAN LIQUOR BARON VIJAY MALLYA LAUNCHED KINGFISHER AIRLINES IN 2005, MOST PEOPLE IN THE AIRLINE BUSINESS SAID IT WAS JUST AN ATTEMPT TO GET PUBLICITY FOR HIS BEER OF THE SAME NAME IN A COUNTRY WHERE DIRECT ADVERTISING OF LIQUOR IS BANNED AND COMPANIES HAVE TO RESORT TO SURROGATE MEASURES TO BUILD BRAND RECOGNITION. ANOTHER REASON FOR SKEPTICISM WAS MALLYA'S LARGER-THAN-LIFE PERSONA THAT IS ASSOCIATED WITH LUXURY YACHTS, SWIMSUIT CALENDARS AND THE GOOD LIFE.
THOUGH OPERATING IN ONE OF the fastest-growing airline markets in the world, Air India and Indian have for some years now been in terminal decline. The former is a classic example of a flag carrier plagued by the ills of a bloated workforce and an aging fleet, the latter a largely domestic operation that has ceded market steadily to nimbler privately owned rivals for the past decade.
Air traffic at Hyderabad in south central India has grown in tandem with the city's rising stature as an important IT and biotechnology hub. Passenger traffic in 2006 soared 50% over 2005, making it the fastest-growing Regional Base in the Asia/Pacific region for airports enplaning more than 1 million passengers, according to Arthur D. Little.
IT WAS AN ADVERTISEMENT THAT STRUCK A CHORD among millions of Indians. A poor carpenter in a village carves an aircraft model out of a block of wood for his school-going child. The child loves the model and plays with it all day, even placing it by his pillow while sleeping. Fast-forward 20 years to the now aged carpenter, who is surprised to receive an airline ticket by mail from his son who lives far away in the city. The whole village shares the carpenter's joy as he leaves for the airport to visit his son on what is obviously his first airplane trip.
AFTER A DREAM RUN THAT SAW
the doubling of capacity in two years and the opening up of dozens of routes all over the country, India's domestic airline industry seems to be headed for a hiatus. Signs of weakness in the sector are now there for all to see.
Every airline is battling red ink and the carriers are expected to tot up aggregate losses of more than $500 million for the year to March 31, 2007.
Look around any airport terminal in India these days and you notice the change from even five years ago. Gone are the gents in suits and women in muted silks; people in the waiting areas today are a truer reflection of the country at large. A rapid increase in the number of airlines and the reduction in fares that followed have brought air travel within the reach of millions of people who had never flown before.
Travel almost anywhere in the Asia/Pacific region and you will see Indian aircraft engineers and technicians at work at airlines and maintenance outfits. Middle Eastern carriers such as Emirates, Qatar Airways and Gulf Air also employ a large number of expatriate engineers poached from Indian Airlines and Air India.
It was not so long ago that India's skies were tightly controlled by a government that viewed air travel as an elitist business. Now they are opening up fast.
Apart from the consumer, probably the biggest beneficiary of liberalization is Jet Airways. The Mumbai-based airline has chipped its way through a system in which everything from the choice of routes to the fares charged had to be cleared by the government. Following the acquisition of rival Air Sahara in January, Jet is in a dominant position and now controls about 50% of the domestic market.
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