The Unified Aviation Market of Asia (UAMA)
If we see the landscape and Geography of Asia, we can notice two things first, Asia is vast, very vast. Secondly, Asia’s Topography is diverse. The vastness and diversity of Asia’s topography makes it a continent fit for Air travel. The vast distances of Asia make Air travel feasible and economic. But it will come as a surprise that a continent with such a need should have differing policies towards Air travel. Some Nations in Asia have all but stifled the aviation market.
It is difficult to realize, but true that the more liberal a Nation’s air policy, the more is the economic growth. How? Well, liberal air policies lead to fall in Air Tariff rates. Because of a fall in air travel prices, the public will tend to use Air travel more frequently for transportation. As more and more people travel, there will be increased interaction and transaction. This will lead to more circulation of money and increased economic Activity. Additionally, Air travel saves a lot in travelling time and is relatively safer than other modes of travel.
Therefore, Asian Nations must come together and open up their skies (air space) and liberalize air travel. They must form an organisation, UAMA, where all the stakeholders come together. At UAMA they must make a holistic plan and strategy to free up Asian skies and make it more profitable. This will have a positive effect on the aviation Industry and Tourism as in its entirety.
Moreover the global crude oil prices have reached a new low. Now is the time for Asia to unite and bring about a revolution in its skies.
There are several other benefits of a liberalized UAMA-
- Aviation is a Technology intensive Industry. Because of this, there will be a demand for highly skilled labour. This will improve the technical competitiveness of the countries involved in UAMA.
- Due to a Unified Aviation Market there will be a need to standardise Aviation practices and regulations across Asia. This will greatly help in creating a credible system of Asian Standards in Aviation.
- There will be increased competition for the skies. Competition will drive down prices further for the Consumer/Passenger. Imagine, a Russian passenger wanting to travel from Almaty (Kazakhstan) to Dushanbe (Tajikistan) can choose between Air carriers based in Singapore, Malaysia, China, India or Sri Lanka. With so many choices, the carriers will drive down prices to attract passengers.
- Some of the farthest and most isolated regions of Asia will get connected to population centres. For example India’s North East region, China’s Tibet, Karnali Zone in Nepal, and the Bolaven plateau of Laos etc will all become connected to major urban centres within and outside their countries.
This will greatly ease the hardships of the people who used to face difficulty due to isolation.
The Indian market especially will be greatly energized by this endeavour. The Government’s start-up and Skill India policy can have a positive impact on the Airline business in India. Just like the IT revolution provided jobs to millions of Indian Youth during the 90s, the aviation sector is now waiting to do the same. India carries more than 8 million air passengers a year.
The government on its part has to reduce or abolish the Air Fuel Surcharge which makes up almost half the cost of a domestic Plane Ticket. This will draw passengers to air travel and boost the aviation sector. Along with fall in crude oil prices and abolition of surcharges, the Plane ticket costs will be slashed to less than half of the present value. Some routes may become cheaper than even rail travel. Add to this the time saving aspect of air travel and you have the perfect mode of travel for India.
Opening up the aviation sector will also reduce the passenger burden on the road and rail sector. The Rail sector is already facing a financial crisis due to the Rs 25,000 crore losses annually in the passenger segment.
It’s time to pull up our socks and bring about a revolution in Indian Skies.
Dr. Kartik Hegadekatti is an Indian Civil Service officer. He is the Joint Secretary of CDMT, Govt. of India, and presently serving in the Ministry of Railways. Views Expressed are Personal. His blog site is http://hegadekatti.blogspot.in/