Airlines do not seem overly perturbed by the impact of cost cutting on safety, perhaps because safety is not tangible. However, there is a need to exercise a degree of cost management.

Blotches marring the golden sheen of what was heralded by some as the renaissance of the Indian aviation have revealed the malaise that lies beneath. Evidently, the Consultative Committee of the Members of Parliament attached to the Ministry of Civil Aviation, and chaired by the Minister for Civil Aviation Praful Patel has a bit of thinking to do.

On a positive note, the aviation industry shows all signs of being on a high growth trajectory—four new airlines are waiting in the wings for final clearance to take off, the number of passengers is expected to rise by 20 to 25 per cent this year, there are better choices of airports connected and comparison of air travel to a rail journey still favours the former if the marginal difference of fares is weighed against the substantial time saving that accrues as a trade-off. Although the 25 per cent growth projection is a bit modest when compared to the 30 per cent expected earlier on (based on last year’s figures), it is still an indicator of robust growth. Airport infrastructure is also gathering momentum with private participation on the rise in parallel with a sizeable planned expenditure by the government.

In comparison, the flip side of the coin is a bit mottled. An inordinate and unexpected rise in the cost of Aviation Turbine Fuel (ATF) has dampened the spirit considerably. Airlines have had to revise their fares ever so frequently under the garb of surcharges, and there has been an impact on the volume of passengers carried with consequent drop in load factors for most airlines. Valiant efforts by Praful Patel to get all states to reduce the sales tax on ATF to a standard 4 per cent have borne only limited results and his entreaties to the central government about the need to do something about the high ATF prices have fallen largely on deaf ears as the Ministry of Finance and Ministry of Petroleum also have their own constraints. Even those states which had reduced tax on ATF to 4 per cent are now threatening to go back to the earlier, higher figures as they feel that reduced taxes should have been rewarded by a drop in fares—which has not happened. Meanwhile, fuel costs, accounting for around 40 per cent of an airline’s expenditure bill a year ago, are now moving closer to 45 per cent. Profits, therefore, for any of our airlines remain a distant dream. The options open to an airline in its pursuit of profits are limited. Cutting down fuel costs is beyond their control. Increasing fares in the cut throat competition would be self defeating. So, where and how do they cut costs? The answers—almost all of them—impinge directly or indirectly on aviation safety.