Asean open sky

The proposed open skies agreement with Asean countries, scheduled to kick in from 2010, seem to be heading for turbulence even before take-off.

The Indian avian industry is an emerging industry. The air traffic is increasing with more and more people traveling through air route. This has become possible because of increasing low cost airlines and growth of service industry. Now a day’s people want to save their time by traveling by air route. Many new players have entered in this industry. Earlier it was the monopoly of Air India and Indian (Indian Air-lines). Most of the players still have to break even.

According to statistics available the Indian carriers are estimated to make losses to the tune of Rs 2,200 crore this year. It is because of stiff competition in the avian industry. The present strategy of the low cost airlines is that they want to target new customers by luring them to experience the travel in their flights. In order to reach to more and more customers they are giving huge discounts. There are many other problems at present scenario in the aviation industry. The fuel cost is the big issue for them. For carriers in other countries the cost of fuel is below 20 percent of total cost but for Indian carriers it is above 40 percent.

In India there is lack of professional pilots. Now more and more institutions are required which can fulfill the demand of pilots. Again there is a restriction on foreign pilots. The Indian carriers are not permitted to go international for the first five years of their inception. Once the international players are permitted to enter the Indian sky the competition will raise further to extreme level. The Indian carriers are already facing the problem of huge loss. If the foreign players are allowed to enter in 2010 the industry will not be in a situation to face the competition from the internationally established player.