The Hindu : 'IA seeks to enhance market share'

Online edition of India's National Newspaper
Friday, Jul 04, 2003

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National

'IA seeks to enhance market share'

By T. S. Shankar

CHENNAI JULY 3. The Chairman and Managing Director of Indian Airlines, Sunil Arora, while expressing optimism that there are positive trends of air traffic "looking up" — both on the domestic and international sectors — after the SARS syndrome that shook the global aviation sector, said the current focus was to "keep on striving for upgradation of product and at the same time make efforts for capacity augmentation, both short-term by leasing of airplanes and long-term acquisition plan of 43 planes, still waiting for the Union Cabinet's approval".

"We are trying to be pro-active on the marketing front and our aim is to consolidate and enhance the market share, as we now carry about 20,000 passengers a day with a total fleet of 59 aircraft", Mr. Sunil Arora, said in an interview to The Hindu, at the end of his three-day official visit to Chennai.

"Our proposal for the acquisition of 43 airplanes has now passed the first stage of Pre-Public Investment Board (PIB) clearance and as and when it gets the PIB's and Cabinet's nod, we hope to be able to augment the capacity both ways - replacement as well as fresh addition", the IA chief said while explaining the strategies planned for consolidation of the domestic carrier.

"Our techno-economic Committee has recommended the induction of 43 planes as our Airbus-300s are getting phased out and Boeing-737s are also getting replaced, as it is an ageing fleet. Therefore, we are looking at replacement of Boeing-737s" Mr. Arora said. "In our recent Board meeting, it had been agreed to set up a small committee to assess whether we should "go more for leasing" till the long-term augmentation proposals are approved at various levels of the Government.

On the airlines efforts to improve market share, Mr. Arora said the factor could not be delinked from the issue of capacity. "Even with constraints in capacity, we are unable to fully utilise our fleet in the most optimal manner, as we have to cater to a certain number of routes, which are non-trunk, multi-stop sectors as a part of fulfilling social obligations. Our current market share in the domestic sector ranges from 40 to 42 per cent. At its peak, it has touched even 44 per cent. But, we are not satisfied with that. We would not like to be in a kind of situation where the competitors keep on augmenting their capacity and we keep on losing our share", he said.

Referring to the levy of sales tax by the State Governments on Aviation Turbine Fuel, he said it would certainly have a cascading effect on the airfares. "We have been making constant appeals to the Chief Ministers for the past two years seeking rationalisation of sales tax on ATF, which is an industry issue and not an IA centric one".

"According to one of the recent IATA surveys, the combined losses of the airlines the world over, have practically wiped out the profits of the last 50 years and to say that India would remain unaffected would be denying the obvious. In India, we saw a downturn of traffic post-September 11 and we also saw a certain level of stagnation within the country.

But going by media reports and aviation business analysts, there was a revival of traffic during 2002-2003. But, if you analyse the figures even in 2002-2003, we were not able to reach the levels of 2000-2001".

On the aftermath of SARS, Mr. Arora said that with WHO withdrawing or diluting its travel advisories for most parts of South and South-east Asia from the SARS list, "IA hopes to catch up on the lost time and see that we are able to carry more people."

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