Posted by: John Elliott | November 23, 2008

“Bed and Bhai” rules India’s aviation

It was an extraordinary session yesterday afternoon at the Hindustan Times’ Leadership Summit when  three men, who between them more-or-less control India’s airlines, assembled on the stage and play-acted their way through a 45-minute session. They told us little, but revealed a lot about how well they get on together

There was Naresh Goyal, founder chairman of Jet Airways, who has got on famously with successive aviation ministers for years. Also Vijay Mallya, founder chairman of Kingfisher Airways (named after his United Breweries’ beer), who gets on well with all sorts of people, including ministers. Between them the two have 55-60% share of India’s air traffic.

And there was their ringmaster –  the urbane minister of aviation, Praful Patel, the government’s top Teflon Man, who controls Air India which has an 18% market share. He is clearly a good friend of Goyal and Mallya, though he mostly kept himself teflonically detached on the stage.

The theatre started well. The moderator had said that Jet and Kingfisher were now “in bed together” –  a reference to the two airlines co-operating to make savings. The two men would “not go to bed because we still like girls,” commented Goyal.

Goyal respectfully greeted “Patel Bhai” (bhai = brother). A few minutes later Patel said: “I hope you don’t misunderstand when Naresh Goyal said Praful Bhai” – scarcely surprisingly given the phonetic connotations, and that bhai can mean an underworld don in Mumbai.

The only slightly serious moment was when Patel asked them to lower airfares, now that fuel prices have come down dramatically, and they both said No. I suspected that was scripted, though Patel has hit back this morning with a story in the Business Standard that Air India will be reducing its prices – subsidised by the government which will inject more equity into the ailing carrier and will no doubt give more to bale it out if necessary.

The air fares point led to more jokes yesterday. Mallya said there was a similarity between his drinks and airlines businesses –“they both make you fly”. Goel commented later that he only had an airline to run, whereas “Vijay can live on the liquor” if reduced airfares lost him income (Kingfisher Airlines has never made a profit).

But the most interesting part of the session was the way that Patel managed (as he always does) to talk about India’s airline problems as though they were someone else’s responsibility, without acknowledging they are really his failings. The problem, he said, is infrastructure and a lack of a world-class “hub” like Dubai or London. The country needed more efficient airports, and it needed a school for pilots. Without those things, he seemed to be saying, don’t expect things to get better,.

Patel proudly said that there are now 400 passenger aircraft flying in India compared with 100 in 2004, without of course acknowledging that he has done little to make their operations efficient on the ground.

In the four years that he has been aviation minister, he could have done much more to improve the infrastructure at countless chaotic inefficient airports around the country, instead of just basking in the glory of having privatised (through highly questionable procedures) Delhi and Mumbai airports. And the government could have encouraged the formation of a pilot school.

The audience loved it. All good theatre but no substance!


Responses

  1. […] Patel, India’s urbane but under-performing aviation minister, who I described as the government’s “Teflon man” in an earlier blog, has also been a target of leaks to the media. He frequently issues smooth denials of any problems, […]

  2. well said prashant!
    john has a brilliant way of weaving words in his articles…

  3. John elliott has said a lot between the lines in this post. The cosy comfort between government and industry is sometimes a good thing, but not always.


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