Pushpaka Aviation gives tough competition to Air-India

Rao: Asking for moreMaharajahs are haughty beings, but last month, one of the tribe had to bow to an irritated Arab sheikh. Air-India started a weekly flight to Sharjah in the Middle East after the ruler of that small state made it clear to the Indian Government that he would brook no further delay in starting a Bombay-Sharjah flight, announced for mid-February.The flight had been-cancelled at the last moment, allegedly under pressure from a Bombay-based private operator, Pushpaka Aviation, which had three flights on this route three times a week. And there hangs a tale of a cat taking on a king.Civil Aviation Ministry officials disclosed that Pushpaka was allowed, with the concurrence of both Air-India and the Director General of Civil Aviation (DGCA), to carry 500 passengers a month to and from Sharjah. The former tourism and civil aviation minister, J.B. Patnaik, had allowed the small carrier to operate between Delhi and Madras and between Bombay and Sharjah. After a furore in Parliament, the Delhi-Madras run was stopped, but the Middle East flights continued. And Pushpaka is proving to be a match for Air-India.No sooner had the Maharajah started his weekly run, than Pushpaka increased its frequency to four flights a week and announced that a fifth would be started on April I. A new flight to Sanaa, another Gulf state where Air-India has flying rights, was also announced.Air-India officials insisted that additional flights by the private carrier would make no difference to their own operations. Said a senior public relations officer: "We do not come into the picture at all. It is entirely the Government's decision to allow additional flights by Pushpaka."Confirmed Harsha Vardhana, executive assisistant to Raghu Raj, Air-India chairman: "The flight quota has been increased at the DGCA level, but as long as we get full flights and our market share is protected we have no complaint about it."Competition: The argument that Pushpaka does not affect Air-India's market is a specious one, as the two are in direct competition on the Bombay-Sharjah route. Furthermore, Dubai is only 17 km from Sharjah and, although the national carrier flies six times a week to Dubai, large numbers of Indian passengers from Dubai prefer to motor across to Sharjah and travel on the cheaper Pushpaka fares.Pushpaka charges Rs 2,100 for the Bombay-Sharjah run, while Air-India charges Rs 2,470, which means that the feisty little carrier is 15 per cent cheaper than the Maharajah. Air-India's revenues are being bitten into as well.Pushpaka is earning about Rs 4.8 crore a year on this sector, and with the fifth flight coming up, it's revenue will go up to Rs 6 crore a year. Presumably, a large share of this money would have come to Air-India, if there was no competition. Pushpaka first started its Gulf flights in 1979, with permission to carry cargo to Sharjah and ferry passengers on the return trip, with a maximum of 350 passengers a month. Soon after the January 1980 Lok Sabha elections, the Government restricted meat exports from the country.Arguing that this deprived him of his cargo bookings, H.P. Rao, chairman and managing director of the company, asked for permission to carry passengers both ways. The quota was fixed at 500 passengers in each direction. In actual practice, admits Rao, "We are already carrying about 1,000 passengers a month each way, and with five flights a month this will increase. We've been requesting them to increase our quota and not to restrict us."Allegation: The restrictions, however, are confined to paper, as the carrier disregards them with impunity. Quotas aside, the airline continues, by competing directly with Air-India, to openly flout the rules laid down for private aircraft operators.Under the Air Corporations Act, 1953, no private operator is allowed to fly in a sector where the national carrier operates, unless the private carrier is operating "on behalf of or in association with the Corporation". While Air-India spokesmen deny any knowledge of an agreement with Pushpaka, Rao insists that he is operating as the national carrier's associate and paying it a royalty, though he refuses to disclose just how much.As for Rao himself, his remarkable rise on the aviation scene over the last decade has been punctuated by regular allegations about him buying political patronage. He was a field officer in the Life Insurance Corporation, and in 1969 set up an agricultural spraying company.A year later he imported two Bell helicopters for aerial spraying. In 1975 he bought a third, and by the time Indian Airlines started selling its Caravelle fleet in 1979, Rao was ready. Pushpaka Aviation bought its first Caravelle for Rs 30 lakh the same year, and flights to the Middle East began.The airline came into its own in 1980, after it obtained the two-way passenger rights to Sharjah. Last August, Pushpaka purchased another Caravelle at a price which critics claimed was "throwaway".Reluctant to disclose the precise amount, Rao nevertheless admits that his total disbursement on plane, two spare engines, spare parts, and overhaul, was less than what he had paid for the first Caravelle.Explaining that his was the only tender, Rao says, "It is not feasible for other companies to buy these planes. Only an organisation like ours which maintains them without any pomp and show can afford to tender for them."Confidence: The Bombay-Madras flight award was a flagrant violation of the Air Corporation Act, and was hastily withdrawn following the uproar in Parliament. Opposition members charged that Pushpaka was favoured only because the airline had loaned its aircraft to the ruling party for the Lok Sabha and state Assembly elections. Worsted on the domestic front, Rao is now concentrating his energies on the international market, pushing for more passenger routes and quotas.At the moment, only one of his planes is fully occupied, although he seemed confident that the Government would throw Pushpaka enough crumbs to keep it aloft. As he asserts, tongue-in-cheek: "I am grateful to Air-India for allowing me to fly alongside them to Sharjah and Sanaa. But if they have allowed me to Sanaa, then they might see their way to allowing me to Dubai also."Another company could soon join the fray. Huns Air Pvt Ltd used to operate a cargo flight to Sharjah but, according to its chief, Uday Kilachand, stopped after Air-India started flying the route. It is getting back into the race now.Says a confident Kilachand: "We have applied for permission and we will probably get it within a week or two. We are hoping to get permission for 1,000 passengers a month like Pushpaka." With all kinds of flying machines in the air. the Maharajah will have a hard time keeping his turban upright.Published By: AtMigration Published On: Nov 25, 2013 09:40 IST--- ENDS ---

Download App

Get 37% off on an annual Print +Digital subscription of India Today Magazine

Pushpaka Aviation gives tough competition to Air-India

Pushpaka charges Rs 2,100 for the Bombay-Sharjah run, while Air-India charges Rs 2,470, which means that the feisty little carrier is 15 per cent cheaper than the Maharajah. Air-India's revenues are being bitten into as well.

PUBLICATIONS

TELEVISION

EVENTS

RADIO

GAMING

USEFUL LINKS

PRINTING

WELFARE

DISTRIBUTION

SYNDICATIONS

WEBSITES

EDUCATION