Aviation Outlook India 2008: Massive growth gradient for India, says CAPA chief

Mumbai: Peter Harbison, executive chairman of the Centre for Asia Pacific Aviation (CAPA) termed the last four years of airline restructuring and expansion in India as ''truly remarkable''.

In his opening address to the 4th India Aviation Outlook Summit, Harbison said that it was always going to be difficult to accelerate Indian aviation to achieve the levels it should be achieving, as over a decade of neglect and stagnation meant that the industry was ill-equipped to deal with growth during good times, let alone when external factors turn ugly. ''We have barely even scratched the surface of this nation's air travel growth potential yet,'' said Harbison. ''There is still a massive growth gradient for India, but this will not be an even, or easy, process.''

Harbison said that the global aviation industry was in for critical times, with 2008 likely to be a formative year where the global airline business will change irreversibly. ''But it is simply not enough to engage in collective hand-wringing and to leave it to the airlines to try to find a way out of the current difficulties,'' he warned.

A large part of the current problem is a global one, said Harbison, which is largely beyond the control of any airline. Fuel prices, since the beginning of 2007 has alone added between 10-20 per cent to the cost of operations, and without that massive increase, there would be no crisis now, he said.

''Yet, unlike the oil crisis of the 1970s, the airline business today is also at a pivotal time in its history. Back then, apart from the US carriers, almost all airlines were government owned. While the crisis bit hard, the bottom line was that there was no bottom line. Governments generally subsidised their airlines through the storm, fares went up and traffic slowed.''

''That can't happen today. Since then, the airline industry is dominated by private investment, subject to consumer trends and is quickly evolving towards a more rational business. But it is in many ways still neither fish nor fowl,'' he said.