Reopening air travel

Kashmir Times. Dated: 5/23/2020 1:19:15 AM

Decision to reopen air travel is welcome step, but it is more important that public transport including Railways are also reopened

The central government announcement on Wednesday resumption of domestic flights from May 25 in a calibrated manner appears to be in line with the decision to slowly reopen some sectors of the economy. But the government also needs to pay attention to public transport system like buses and trains, which are used by majority of the common masses for commuting from one place to the other. Only minute percentage of people uses the airlines for travel between the metropolitan cities and other big towns in the country. The move on air travel will come as a much needed relief for the beleaguered airlines industry after the commercial flights were suspended on March 25, with only cargo and special flights being allowed during the lockdown period. But the operation of the domestic flights is already facing hurdles in view of the guidelines that would stress on social distancing making it almost impossible to carry more than one-third of the passenger capacity of the aircrafts during the normal times. The airlines will operate only a fraction of their flights in the beginning and slowly scaling up the handling of the passengers later on. It is not an easy task for the airlines to stick to some of the guidelines as it will not be profitable to operate these flights on regular basis across India. However, with the Coronavirus continuing to spread, and most families likely to curb their extra-spending owing to the prevailing economic and health uncertainty, it is difficult to estimate the extent to which demand for air travel will revive in the near future. Metros such as Delhi and Mumbai, which are the worst affected by the virus and account for an overwhelming share of the total air traffic in the country, may not see demand recover meaningfully in the near future. Till the pandemic scare slows down, routes where the virus spread is more are likely to be less in demand. Moreover, as India will not be issuing any visas anytime soon, international operations of the domestic carriers will also remain suspended.
With the Centre having taken a decision to regulate airfare, with a range being prescribed for each route like, the Delhi-Mumbai airfare is capped between Rs 3,500 to Rs 10,000, the check up fares are unlikely to get profitable ticket selling in the market. The central government's rationale for doing so appears to be two-fold: Firstly, to ensure that tickets don't become exorbitantly priced for the traveller, and secondly, to prevent the stronger airlines from using their financial muscle to indulge in pricing that will hurt the financial viability of the competition, driving them out. While dynamic situation may call for dynamic response, it must be pointed out that price controls are counter-productive in the long run. Price controls usually lead to problems of shortages, rationing, deterioration of product quality, and even black markets. As such, governments should avoid the temptation of setting prices and, instead, allow the market to function. It's best not to interfere with market prices' mechanism. The issues of 'predatory and monopolistic pricing' are best left to the Competition Commission of India for examination, which takes into account market dominance, as well as underlying cost structures. The government has notified that the fares will be fixed only for a period of three months for the reason that this cannot become rule for the airlines. With the pandemic yet to be contained, airline operators and airports will need to ensure that the standard operating procedures on health and safety of passengers are followed in letter and spirit. The onus is also on passengers to ensure compliance with the notified protocols for their own and fellow passengers' safety. The airline operators and airport handlers will need to maintain the required discipline and norms of social etiquette. The main challenge is to control the spread of the Coronavirus, while allowing economic activities to resume gradually.



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