about that Rs 3,920 one-way fare from Delhi to Mumbai? Chances are
you're thrilled. Though Rs 2,405 by ac ii-tier is still some distance
away, the differential does not indicate the hardship of toilets-that-are-holes,
uncomfortable bench seats, meals-on-laps, and of course, a journey
that lasts the better part of a day-if all goes well.
Now, the big question: could the airlines do
Yes! A million times yes. How about a Delhi-Mumbai
air journey at Rs 1,500? That's about the same cost as a ticket
on the hellishly cramped ac III-tier (why couldn't they ever stick
to the gloriously spacious and comfortable ordinary first class?).
Such heady fares are just a sensible tax cut
away. In India, aviation turbine fuel is a critical input cost to
airlines: the fuel is about 50 per cent higher for domestic airlines
than it is for foreign airlines, or elsewhere in the world. Then
there's a 15 per cent inland air travel tax imposed during the Gulf
War in 1990 to help pay for the evacuation of Indians. Of course,
once imposed, the tax mandarins simply refused to take off the tax.
And there's every state lining up for its share of the booty, imposing
a sales tax of between 20 and 40 per cent on aviation fuel. The
result is that Indian Airlines, Jet and Sahara pay Rs 19,000 per
kilolitre of aviation fuel, while international prices hover around
Rs 9,200 per kilolitre. Reduce the cost of fuel to world standards
and you could have that ticket for Rs 1,500.
It's a truism that business and society are
becoming increasingly globalised. The engines of this growth are
cheap telecommunication and inexpensive air travel. Telecommunication
has, of course, been the prime driver in creating the flourishing
global village-and marketplace-but physical transport, particularly
by air, has played a big, big role in creating initial contacts
between people. These contacts are then maintained and enhanced
by telecommunication. The boys in Bangalore will tell you how important
cheap fares and direct flights out of their city to international
destinations have been to creating India's tech juggernaut. It's
quite clear that travel and telecommunication are synergistic. Each
feeds and supports the other. The tragedy of Indian aviation is
that no one realises this intertwining-or if they do, it simply
isn't accorded due attention.
If you look at it strictly in rupee terms,
the new discounted prices are hard to match anywhere in the world-despite
the fact that the rest of the world does not have to shoulder the
tax burden that airlines in India do. A little research will show
you that the cheapest ticket from New York to Chicago (almost the
same distance as Delhi-Mumbai), one of the densest routes in the
world's most competitive airlines market, costs $79 (Rs 3,860).
Let's forget all about PPP (purchasing-power-parity)
syndrome for the moment. This cost is for a ticket booked 30 days
in advance, a ticket that sends you on an indirect route that could
take up to six hours: The Delhi-Mumbai discounted ticket, in contrast,
will whisk you across in one hour and 50 minutes.
The message here is that like almost anything
sold in India-plastic buckets, newspapers, lunch, cellular air-time-an
airline seat too can be cheaper than anywhere else in the world.
The argument that aviation fuel is dear to India doesn't really
work because it accounts for roughly 0.1 per cent of our oil expenses.
So what stops the government from letting air
travel proliferate, much like it allowed car production to skyrocket?
Only an age-old penchant of thinking short-term. They say things
are changing. We have belatedly realised how important expressways
are to unlocking economic energies. But reducing air fares becomes
all the more urgent given the fact that highway development takes
time and will still leave big swathes of India untouched. Trains
and buses are likely to be ponderous and uncomfortable for a long
time to come. It's time to free the skies.