May the force of coopetition be with you

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: Coopetition: sounds quite paradoxical, doesn’t it? Let me explain. It is but obvious that increasing competition in any industry brings with it a fair share of issues that must be dealt with—some explored, some unexplored. Similar is the case with the aviation industry in India. There are quite a few pressing issues that need to be weeded out while in their infancy, thereby preventing the metamorphosing of any of these issues into gigantic problems in time to come. The Indian civil aviation industry has really grown significantly in the past 18 months, with a slew of airline launches—Kingfisher, Spice, Indigo and GoAir. And so, with other airlines waiting in the wings to join the industry as quickly as possibly. It is important to appreciate that this hyper competition is taking hold in an economic environment of increasing operating costs—specially the rise and rise of Aviation Turbine Fuel (ATF) prices, which typically contribute to nearly 40% of an airline’s operating costs in India.

High operating costs only add to an already long list of glitches. Not that all of this is new. Many such issues raised their ugly heads begging immediate attention in the early 1990s, during the last domestic airline boom. We all stood witness to several airlines succumbing to the pressures of business, in spite of the huge potential in the market and the availability of incentives to stay in operation. I am sure that an appropriate tackling of concerns by a central representative body at the right time, back then, would have averted or at least brought down the number of aviation sector casualties.

Hence, as a measure towards avoiding the same sort of circumstances, which in the past resulted in so many airlines going down in a heap, the heads of all the airlines in the country have agreed on the necessity of a central representative body to take up matters of common concern on behalf of the industry. Thus was born the Federation of Indian Airlines (FIA) with Mr V Thulasidas, chairman and managing director, Air-India, as its first chairman. Now, FIA’s role has been defined quite clearly.

The federation will operate as the single voice of India’s aviation industry, and in doing so it will enhance the airlines’ ability to put forth their views to various regulatory authorities, government departments and so on.