'The government's priorities are misplaced'

Q&A/ G R Gopinath

G R Gopinath

He came into the limelight with his aggressive Rs 700 one-way fare on flights across the country. The soft-spoken G R Gopinath, managing director of the country's first no-frill low-cost airline, Air Deccan, talks to Business Standard on the expectations from the government and the challenges of infrastructure faced by the aviation industry. Excerpts:

What is the aviation industry expecting from the Budget and the government?

Everyone around the world is talking of the growth potential of India. But that cannot happen until aviation is seen as a key to that growth.

To make it possible for the common man to travel by air, there should be regional connectivity and it should be affordable. That would give a boost to tourism and also ensure equitable growth.

I recently met ABB chief Ravi Uppal and he told me that he has a factory in Nashik, but it takes him 10 hours to reach there. That is ridiculous "" why can't there be a flight to this city? Why can't a guy from Hasan go by air to see the Taj Mahal?

We have 400 airports in the country "" a majority of which are unutilised. However, the government's priorities are misplaced.

Instead of building fancy terminals, like they are doing at the Dehradun airport, where we are spending over Rs 150 crore, the government should put in landing instruments in these small airports across the country, which will ensure that a flight can land with 1.5 km visibility.

What we have today are airports with no landing instruments, which means you need visibility of over 5 km and, therefore, we have no option but to cancel those flights if the visibility is low. These instruments cost only Rs 1.5 crore.

You can do with a thatched roof terminal for the time being "" let us put the resources in the right place.

But don't we need large and modern airports in metros like Delhi and Mumbai?

Of course we do. We need airports that are 50 times bigger than what we have today. At the moment our metro airports are like a cowshed. True, we are going through a privatisation process.

But that does not mean we should not invest anything in these airports till they are privatised as has happened in the past six years.

As a result, both Delhi and Mumbai airports are choked "" you cannot get parking slots, terminal gates and landing slots on the runaway. For instance, in Delhi and Mumbai only 25 aircraft can land every hour "" that is half the average of any other international airport.

Worse, only one runway instead of the existing two is being used. By setting this right you can virtually double and quadruple the runway capacity.

The other problem is that unlike other countries (there are about five airports around Heathrow in London), which have multiple airports within a distance catering to different kinds of aircraft, we have only one airport.

In India, a four-seater Cessna lands on the same runaway as a Boeing with over 300 passengers, taking the same time on the runway. It does not need rocket science to understand that this is inefficient utilisation.

The policy is flawed. In the new and up-coming Bangalore airport, too, the government has given an unusual concession to the consortium building it "" that no flight will operate from any other airport except the new one.

That is ridiculous and a sure way to kill regional jet connectivity. After all I operate short-haul 30-minute flights on my ATR aircraft.

Why should customers travel for an hour to reach the airport, which is so far off? They should have kept the existing airport for regional connectivity flights.

Adding to the woes, you don't have any parking slots in Delhi and Mumbai "" for instance in Delhi we need three-four parking slots but we have to wait till the new ones come up.

That adds to the cost since we have to park my aircraft in some other city.

Do you mean that new private domestic airlines that will come up in the next few months should not be given permission until the infrastructure is put in place?

No, all I am saying is give everyone permission but build the infrastructure simultaneously. Otherwise many airlines will not be able to operate.

Are there constraints that the government needs to ease for airline companies to reduce costs further?

Of course, the archaic DGCA rules made in 1937, which were made when jets did not exist, need to be changed. The rules add to our cost. For instance, if a Boeing pilot wants to shift to an Airbus, and even if he is experienced, the rules state he still needs to log in 100 hours on an Airbus before flying the aircraft.

Other countries do not have any such restrictions. You need an engineer to inspect the plane every time it lands in an airport. In other countries, the inspection is done by the pilot for a stipulated number of hours.

Our estimates are that the archaic regulations add about 15 to 20 per cent to our overall costs.

We also request the government to allow hedging in ATF fuel so that we are protected to some extent on the volatility of the fuel cost.

If the government improves the infrastructure and gives you these concessions, will the prices fall further?

Of course. We will have a scenario where every seat on the flight will be lower than a second-class AC sleeper on long-distance train journeys.

But do you think the market is big enough for so many private carriers to survive?

We have gone up from one aircraft to 17 aircraft in 17 months. Forty per cent of our travellers are first-time air customers. Competitors like Jet Airways have reduced prices and they have made profits as well as improved on their passenger load factor.

I don't think there will be any problem in selling 1 billion seats in a year "" today we are at 16 million. Even today, China has 60 million airline customers.

We might need 50,000 flights to achieve the objective. All you need is that the middle-class take a flight three to four times a year and you will reach the magic number.

The constraint is not the passengers or the market; it's the number of aircraft and the infrastructure in the country that is needed to support it.

I think you will see the same revolution that hit the telecom sector. Five years ago you could not have imagined your driver with a mobile. Some years later, even he will travel by air.