Wednesday, September 26, 2012

The Practical side of 'Air Kerala', do we really need that?

Cochin Airport

Running an airline may be a status symbol. High flying vehicles were always part of human imagination; they thought about it, dream about it, and want to live on that. Human thirst for flying is exemplified in the character of Ryan (George Clooney) in the film 'Up in the Air'. At one point Ryan says, 'Let's just say that I have a number in mind and I haven't hit it yet...its ten million miles' - of course in air.

So the recent movements from Kerala government, to revive the concept of 'Air Kerala' didn't startle me. However, I wonder, before jumping in to it, can't somebody go to Bangalore and have a 30 minutes talk with Vijay Mallya - owner of Kingfisher Airlines? It is not fair to blame him for all the problems in Kingfisher, even if many like to do so, especially after considering the business history of profitable and efficient UB group. After all, it is his own money (of course that of banks and UB group as well) sinking with Kingfisher.


Let's come back to the problem at hand - the concept of Air Kerala. Running an Airline is a capital intensive business (even if it looks like a hot cake) -  costly airplanes, labour charge of ground engineering & aircrews, cost of maintaining foreign offices, costly jet fuel, cost of compliance with international standards etc. From where the money will come? How much a state government can pay?

I think it will be better to utilise the same money for enhancing the ground, storage and warehousing facilities in Trivandrum, Cochin and Calicut airports. To attract more airlines and bring down the charges, government needs to reduce tax in ATF to reasonable levels, reduce the landing charge in airports and bring in more foreign and Indian airlines to the routes - after all companies will be more than interested in getting a pie of profit which Kerala-Gulf of Persia routes can offer. Let the Gulf airlines (Emirates, Etihad, Air Arabia, Gulf Air, Bahrain Air, Oman Air etc), Singapore, Sril Lankan, Jet, Kingfisher, IndiGo and of course Air India to have more schedules. Passengers may be happier if the airports can reduce the user’s fee as well.

It is important to focus on cargo in the same breath. We need to expand cargo facilities in airports, focus should also be on linking seaports to airports and to other hinterland cities. Enhancing the facilities at Cochin port, building new seaport at Vizhinjam, increasing the capacity of Bypore port by making it a gateway for northern Kerala etc are some steps to start with.

Simply having seaports and airports won't help, unless it is properly linked by road to hinterland cities. If any private parties want to invest they can, let ease the red tapes and encourage them. If government is so desperate to join, then put a maximum limit at 11% and a seat in director board (I think government will get a seat in director board with that stake).


Arabian Sea is big and deep; when you can have a boat to cross it, do we have to try swimming? It’s better to be practical than having heroic misadventures. Before starting, it will be good for the state government to take a look at state treasury, where even the rats may be dying without having enough food.



1. Business Standard.

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