Dinesh Kamath's Editorial 'Another airline halts' that was published in Newsband

Another airline halts

Jet Airways announced a temporary halt of its operations from Wednesday night as funds to keep the airline are going dried up. Banks stood firm on their decision to not release emergency funds to sustain operations. The fact that the banks refused to extend emergency support is probably an indicator of the quantity and quality of the Expression of Interests (EOIs) received by them. It does appear at this point that a miracle will be needed for Jet to take wing again. The collapse of Jet has caused turbulence in the market.

There have been more than half-a-dozen private airline companies that have fallen by the wayside in the last decade and more. Air India is still there because it is propped up with government support. Fuel costs account for about half of the expenses of running an airline. Reckless competition is responsible for the sorry plight of the industry. It was Kingfisher seven years ago, Air Deccan and Air Sahara before that, it is Jet now. Who knows which airline could be next?

Airfares have largely stayed stable over several years, benefiting passengers but biting airlines. It is time that airlines took stock of their collective plight and stopped undercutting each other on fares. The Centre can help too by reviewing fuel taxes and surcharges apart from airport levies. A healthy airline industry can only be good for government revenues

Some people are of the opinion that the government should not help any of these with taxpayers' money. Due to greed, these companies involve in unsustainable practice. Now they are crying for help. Well, the poor of this country don't use airplanes. They should be helped by being given doles rather than help the rich class.

The sources inside these organizations say that huge sum of salaries are being taken by top managements. Instead of increasing the fare prices, managers should take reasonable salary without putting extra burden on the company. Even the normal employees are not paid enough, so it’s high time the remuneration of airlines management are reconsidered.

Here are views of another group of persons. According to them airline companies are aware of where they will land. But they refuse to take corrective actions. Today people are willing to pay high price if they get good service. Take the case of omni bus service; people pay very high fare and this industry is growing every day. There is a big difference in the fare of State Transport buses and Omni buses. Still people prefer to travel by omni bus. In some cases omni bus charges are in par with AC Chair car charges of Train. Still people are travelling by omni bus. They pay high salary and hire good talented people for their operations, Finance and marketing departments from IITs and IIMs. Why they always want government and Banks support? It should be survival of the fittest. In all these cases the management / owners are not at all affected.

Some people question as to why the center should adopt jet airlines? Is it because Nehru did the same. If someone is not competent enough it’s not the problem of center. Is it compulsory that all the incompetent persons have right to make demand for reservation?