Indian aviation industry is passing through a bad phase. Though, Indian carriers flew over 55 millions domestic passengers between January and November against 47 million in the like period of last year, they are finding it extremely difficult to continue with their expansion plans and existing operations, amid rising fuel prices and other policy constraints.
Except the low-cost airline IndiGo, which continued to earn profit, all the other airline players faced tough times and many of them had to cut employee’s salary owing to their bad financial conditions.
The crisis became more evident recently when major private player Kingfisher Airlines cancelled its operation on a number of ...view middle of the document...
To meet India’s increasingly growing air traffic the airlines players are also looking for expansion of their operation.
Yet, the share of air-travelers in India is less than 2 per cent and the mode of transportation for rest of the people remains mass transit systems like Indian Railways, and road transport.
While the aviation sector has shown significant growth in recent past on the growing economic prospect in the country, majority of country’s mass transit systems are still to grow to basic international standards. Though government projects like Mahatma Gandhi Gram Sadak Yojna and Golden Quadrilateral have added pace to the infrastructural improvement towards mass transit projects, yet there is much to be done on this front.
While a bailout package can help the ailing industry bounce back to its growth trajectory, it has become increasingly debatable as to what should be the primary focus of the government. Should it spend taxpayers’ money to help ailing airlines industry or the focus should be on mass transit systems across the country?
More than 70 per cent of our country’s population still live in villages and it is unrealistic to dream of a strong economy without making them part of the growth story. At a time when the government is focusing on inclusive growth, it becomes extremely important to invest on roads and railways infrastructure to bring proper connectivity to about 5 lakh villages of our country. A proper connectivity and higher level of mobility will provide a momentum to agricultural activity in rural areas, thus making a positive impact on the economy.
Indian Railways while boasts of having one of the largest networks in the world; it still lacks adequate infrastructure and technologies in terms of safety measures that is much required. There are many important cities where Railways has still to lay its tracks.
Another factor of great importance is that urban population in the country has swollen rapidly but most of the cities are continuing with the same old transit systems and they have not been able to keep pace with the mounting pressure on the existing infrastructure for transportation. This is resulting in wastage of human resources as people spend hours in traffic jam which eventually affects their productivity. So, strengthening and upgrading mass transit system in urban areas is an urgent need.
A bad operating climate due to unreasonably high Aviation Turbine Fuel (ATF) prices in the sector has brought some of the domestic carriers...