Here Charitable Individualism is the key!… nothing less.

AIRLINES MONOPOLY


Should the government of India step in and bail out the two Airlines viz. Jet Airways and King Fisher Airlines and give them tax breaks and other benefits out of the tax payers’ money?

Both the Airlines had built up its clientèle of techies and executives who were living off the anxieties of the companies, which were pampering them with the hope that they would stick with them. Now that the party is on the wane and the writing is clearly on the wall, the clientèle has dramatically dwindled thereby bringing the squeeze.

It was not long ago, that the Low Cost Airlines (LCC) like Deccan, Go Air, Spice Jet etc had brought revolution in the skies and middle class persons were able to cut down the time of travel, to distances beyond a rail overnight journey, and get a whiff of maximizing the short leave granted to them in their work places. Our Hero who has assiduously built up an elitist image of himself and was keen on bringing in the reflection of his image to his Airlines, seduced Capt. Gopinath and thereby killed the benefits of the opening, created by the visionary zeal of Capt. Gopinath.

Today only the wealthy and the super-skilled who are sumptuously employed can afford air travel. This monopoly attempted to be established by our Hero has fallen flat.

Our hero was an NRI, as per paper reports, and had built his Brand to such dizzying heights that it may not be difficult to plough back the profits of his liquor business and off-set the PUTATIVE losses incurred by his Airlines. Yet he has the gall to ask the Govt. of India to permit him to put his hand into the national till. He had done great disservice to Indians by not only keeping his airlines elitist, but has predated with utter impunity and attempted a monopoly.

The new found friend is the largest share-holder of a company registered outside India. So therefore here we have a recipe for 2 NRIs to come together- use the cash rich companies which send their employees by an elitist airline conglomerate- and write expense accounts and show operational losses.

In the US, they have severe laws like The Sherman Act 1890, The Clayton Act 1914(?) to restrain such TYING UP agreements, so that competition is not stifled. But here in India we have MRTP Act and Competition Act etc., yet none seems to bring out the evil designs of such activities, which are done so openly. We all know that Judge Jackson had arrived at the formulation of splitting up MICROSOFT because their WEB BROWSER business was tied up inextricably with their WINDOWS 98 to the overall detriment of INNOVATION and GROWTH. Had it not been for George Bush Jr., the mammoth wud have been split up a long time back.

But here in India we do not have a conscience that works against this monopolistic forces which would bring them within the mischief of the text of the Acts passed by the legislatures.

The least that we can do, is to check up the Corporate Taxes and Direct Taxes paid out of these two Airlines and see if there have been substantial revenues generated to the country in the past years (but not thru indirect taxes), since their inception, and then take a view based on the contributions made to the national exchequer.

Losses can be generated if one is bent upon building an image without the sustaining power to maintain the image, based on performance.

It is time for Capt. Gopinath to revive the zeal and create a new low cost carrier.

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Comments on: "AIRLINES MONOPOLY" (2)

  1. Respected Sir,

    We are born with an inherent human tendency to always and conveniently find faults to suit our needs.

    While it is beyond dispute that we are talking of the GOLIATHS who have tons of money stashed away in their coffers and apparently seem to be colluding to get a monopolistic advantage in the Aviation sector,
    We need to look more closely at their sorry state when they are stricken by the rather insurmountable oil price fluctuations which they are unable to pass on to the customers as that becomes impossible in the short run.

    A PAAN WALLAH MAY JUST HAVE A KIOSK AND EARN HIS DAILY BREAD SELLING PANS BUT WHEN HE HAS TO OPEN 20 SUCH STORES THEN THE WHOLE THING ABOUT THE LOGISTICS , INVENTORY , PRICE , PROFIT AND INVESTMENT COMES IN.

    Similarly to be the top two players in the aviation and sustain the pressures of the competion notwithstanding the oil prices and burgeoning overheads on account of its staff is perhaps as big a challenge as looking for an oasis in the desert.

    While we may simply dismiss this or be critical as a monopolistic practice we also must appreciate that the GLOBAL ECONOMY IS SHRINKING AND THE CALL OF THE DAY IS MERGERS / ACQUISITIONS / OR SHARED OPERATING COSTS.

    While this may look monopolistic ,the flip side is our Indian corpporates need sustanance in this high cost / high risk industry or very soon the aviation ministry will change the laws and a foreign company with deeper pockets will do the same by acquiring all of these smaller players and we will sing to their tunes and say that they had to succeed as they are big.

    I HOPE AND WISH THAT YOU WILL SEE REASON IN THIS SYNERGY CREATED BY THE TWO MEGACORPS AS THIS IS BOUND TO MAKE A BETTER AND SUSTAINED OFFERING TO THE TRAVELLERS.

    Any educated indian is not a fool by any standards and can bring down these companies by not patronising their services if they do not see the benefit being passed on to them in the long run.

    If these guys make money thru these strategic decisions SO BE IT.

    But the end user should not suffer and must reap the benefits of this alliance.

    SRIDHAR

  2. Dear Sridhar,
    U seem to be mixing up Business with the issue of passing down the benefits to the common man ( which is essentially a socialistic concept). Business is run primarily for profit.
    Kingfisher had positioned itself as an elitist airline and there was nothing socialistic or redolent of welfare-state slant. It was an out and out BRAND building and positioning that was going on.
    Whereas it was Capt. Gopinath who did bring in the concept of the common man. He facilitated the common man to shrink space and expand Time.
    Mallaya at an opportune moment, bought over Air Deccan and the flagship airline of the common man, took a different color (literally too).
    The issue is whether the same persons, who failed in their elitist venture, ought to be supported from the tax payers’ money.
    The solution is that let the GOI see if the accruals from these elitist Airline operators had enriched our coffers and then take a decision .
    I am sure that a person like Mallaya would much rather spend on his BRAND building OBJECTIVE and show lesser profits (if any), than pay taxes.
    As regards foreign operators are concerned, in this case itself one is an NRI and the other co is registered abroad, which gives both these cos to have all the immunities available to Foreign companies.

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