Qatar Airways CEO Laments India’s Aviation Protectionism
The veteran chief executive of Qatar Airways called the aviation industry in India a “closed regime” that is “hugely protectionist” and selling itself short:
India has a very closed air services regime. And it’s hugely protectionist.
The more they open, the more affluent the aviation industry in India will become.
He cites a fascinating statistic that underscores the potential juggernaut of an industry in which competition can flourish:
India’s middle class is 100 million more than the total population of the United States. There is huge purchasing power the people have. But the air connectivity is bad and they don’t want to open it.
As the Indian economy rapidly develops, the potential for explosive growth in air service suggests the pie is big enough for both foreign and Indian carriers.
Al Baker scoffed at a warning from Air India CEO Campbell Wilson that “India must not open the floodgates” and his assertion of a “national interest” justification in creating a reconstituted Air India that offers nonstop routes for Indian travelers to Europe and North America:
Someone should ask him on what basis he calculates national interest. It is in the national interest of India to allow more people to go, allow more people to travel, and grow the aviation industry to create jobs.
He then explained that high load factors suggest there is tremendous room for growth:
I don’t think he has done his homework properly. if he looks at all the load factors of the airlines that have completely saturated the routes into India, it’s all above 85%.
Baker says an 85% load factor means there is demand that cannot be fulfilled and that therefore room for growth. That may be, but further development of that point would have been appreciated: any airline can fill up a price if it gives away the seats for cheap enough. Are those 85% load factors on flights with sustainable fares?
It’s not surprising that Al Baker, who wishes to expand service to India on Qatar Airways, laments how restricted the Bhārat aviation industry is. But his point about the size of the exploding middle class in India underscores what potential there is for so many airlines in the future.
He says, “In today’s open world you cannot have the cake and eat it yourself,” but at least in the short-term, Air India will continue to be given a special privilege to grow without the full force of competition from Gulf carriers.
