By Bijaya Biswal
There has been extensive debate and discussion on the issue of overburdening of the Indian railways with the increase in passenger and goods traffic. With each coach carrying passengers beyond its seating capacity, railway accidents have become frequent. In spite of the launch of initiatives like ‘Clean my Coach”, cleanliness is far from achieved. The quality of travel by railways remains dismal.
Is air travel the next viable alternative?
In the light of the sub-standard railway services, why not lighten the burden of railways and encourage air travel? The question is easier asked than answered.
Soaring prices of air travel play a major spoilsport in effecting this shift from rail to air transport. In an age where airlines are not profiting and the railways are overburdened, flights are still perceived to be a luxury. Resolution of this problem calls for an analysis of the challenges that air travel needs to overcome.
High price for needless extravagance
In the words of Indigos Director Aditya Ghosh, A passenger, who is catching a two-hour flight, does not need an art gallery, public space and a fancy shopping gallery at airports. The world class infrastructure at the airports of metropolitan cities is unnecessary. Customers have to pay for such expenditure which is added to their ticket fare as User Development Fees (UDF). Often, the UDF forms more than 30% of the ticket price, differing from one city to another.
The more extravagant an airport is, the greater is the UDF. Hence, flights taken from Kolkata and Hyderabad are costlier than Jaipur or Ahmedabad, in spite of the high demand which should technically be making the prices more competitive. Though the fees collected are also invested in the development of new terminals and runways, which is very important to cater to the demand for flights and avoid congestion, luxurious infrastructure makes up a substantial part of this fare.
Implications of lower demand on air carriers
Leaving out the customers, who can afford the meagre Rs.1.47 per kilometre flight tariff but have to settle for trains due to high supplemental costs, even airlines are having a bad time. The low-fuel costs are not making up for the problems posed by overcapacity, in spite of the reasonable charges. Only Indigo has been consistently profiting for the past few years. Also, loss-making airlines are unable to pay back their debts, and thus, banks are frustrated. Air Indias debt stood at 200% of its revenue and has been surviving on a bailout of 30,000 crores. Jet Airways is struggling with a debt of 12,000 crores and it hasn’t been long since we witnessed the Kingfisher debacle.
It must be noted that the high rents of lavish airports have also reduced competition between supplementary businesses. These not only make some retail outlets shed more than they make but also escalate prices for the customers.
Lessons from overseas
As per a report by McKinsey on Chinas Airlines, With only 4 percent of the population owning passports, China has beaten the United States and Germany as the worlds leader in international travel in 2012. In 2013, more than 97 million Chinese travelled abroad, spending $129 billion in their destination countries. Chinas current five-year plan shows 70 new airports under construction and ongoing feasibility studies for 28 more.
Singapore has given a 25% rebate on landing in selected airports while Thailand is giving 20%. Japan has introduced cargo discount scheme and Korea has cut domestic landing and parking charges. The US has reached a stage where airlines are not profiting because of the cut-throat competition and spiralling downwards due to prices rather than a lack of demand. For India, the need for opening up air travel to the middle class is very urgent.
Reorienting travel patterns: A Herculean task
The path will not be easy. With more population shifting to airlines, there is a need for better management of air traffic control, efficient aeroplanes with enhanced capacities, development of more runways in larger airports and construction of more airports in Tier-2 and Tier-3 cities.
It is high time to take the plunge, especially when India has shown its willingness to invest in transport development by proposing the Mumbai-Ahmadabad bullet train. Railways cannot bear the pressure of expansion and have been rightly subjected to strategic expansion by the first step of doing away with a railway budget. Promotion of air travel with a holistic approach is much needed if India wants to be an ace economy.
Featured image: Pixabay