Government’s dream of making new world-class Indian airports like Delhi’s T3 global aviation hub may give an impetus to the aviation ministry’s long-delayed proposal of allowing foreign airlines to take up to 26% stake in domestic carriers. “This issue would be discussed in coming few days. A final view may be taken shortly,” civil aviation minister Praful Patel told TOI from South Africa.
While FDI up to 49% is allowed at present in domestic airlines, foreign carriers have been kept out till now due to security issues. Also there was a feeling that fledgling Indian carriers were susceptible for hostile takeovers as they have been passing through a financial air pocket in 2008 and 2009. “Things are changing for better now and the outlook looks good for the industry,” Patel said.
The GMR-led Delhi airport management has sought government’s help in making Delhi a hub through friendly policies and made this appeal at T3’s inauguration last week in front of Congress Party chief Sonia Gandhi and PM Manmohan Singh.
Government now wants T3 and other Indian airports to become a hub like Dubai, Singapore or London in coming years. But all the global hubs ride on strong local carriers. For instance, London, Amsterdam, Dubai, Singapore and Hong Kong have become hubs due to British Airways, KLM, Emirates, Singapore Airlines and Cathay Pacific, respectively. Also, the huge investment made in developing airports like T3 can be viable only if they get adequate traffic that only hubs generate.
India is a huge aviation market but will remain a feeder destination for foreign airlines in Gulf and Southeast Asia, which take passengers from as many cities as possible from here to fill their widebody flights from the hubs to destinations across the world. “Foreign carriers will not use Indian airports as a hub. That job will have to be done by a strong desi airline which can do well with the expertise of big global carriers and their funds,” said an airline CEO.
Jet and Air India — two of the three Indian carriers that fly abroad — have their hubs abroad in Brussels and Frankfurt. But T3 has forced them to dream of using this as a hub. AI had recently appointed global consultant SH&E to make a fleet and network plan for it. The consultant recently presented its report to AI’s strategic turnaround committee, comprising of private sector biggies like Anand Mahindra, Amit Mitra and AI CMD Arvind Jadhav.
The consultant has recommended using Delhi as a hub by launching more non-stop flights from here to North American destinations like JFK, Toronto, Chicago and even launch nonstops to Melbourne. Frequency of daily flights from IGI to important destinations like London has also been suggested to increase, said sources. Vijay Mallya’s Kingfisher, which has been rooting for FDI from foreign carriers, said it will use Delhi as a hub by offering connectivity between London and Bangkok, Hong Kong etc via T3.
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