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Business News/ Companies / Will India’s airlines lobby go telecom’s way?
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Will India’s airlines lobby go telecom’s way?

India's aviation sector may go the way of the telecom sector, with the entry of new companies seeing the emergence of a new lobby group

With the Federation of Indian Airlines (FIA) having filed cases against the entry of AirAsia India and Tata SIA Airlines, it is unlikely that the two will join the grouping. Photo: BloombergPremium
With the Federation of Indian Airlines (FIA) having filed cases against the entry of AirAsia India and Tata SIA Airlines, it is unlikely that the two will join the grouping. Photo: Bloomberg

New Delhi: India’s aviation sector may go the way of the telecom sector, with the entry of new companies seeing the emergence of a new lobby group.

Sure, no one’s as yet talking of a possible rival to the Federation of Indian Airlines (FIA), but with the lobby group having filed cases against the entry of AirAsia India and Tata SIA Airlines, it is unlikely that the two will join the grouping.

Tony Fernandes, group CEO of AirAsia Bhd, amid a bitter battle with FIA said on 1 June: “Don’t let cartels win and not let ordinary man fly."

AirAsia India CEO Mittu Chandilya didn’t respond to a query on whether his airline would join FIA.

The Tata group and Singapore Airlines new venture Vistara too seemed unsure.

“We have not made a move to join Federation of Indian Airlines (FIA) as of now," a Vistara spokesperson said.

Hyderabad-based regional low-cost airline Air Costa’s spokesman said “no decision has been taken in joining FIA." Air Costa has been flying since last year.

India’s telecom lobby group Cellular Operators Association of India (COAI) was widely seen as representing the interests of first-generation mobile telephone companies such as Bharti Airtel Ltd and Vodafone India Ltd. New entrants that were permitted to offer mobile services through fixed line licences that were converted into unified licences—a move opposed by COAI—formed the Association of Unified Telecom Service Providers of India (AUSPI). The two lobbies continue to oppose each other on most issues.

FIA’s members are Air India, Jet Airways, IndiGo, SpiceJet and GoAir.

Air India has not been part of the lobby group’s legal opposition to the new airlines.

Apart from AirAsia India, Costa, and Vistara, the government recently gave permission for six new domestic airlines.

The aviation ministry is not sure who represents the industry now, said a government official. “Recently when aviation secretary wanted to call for a meeting to take views of the industry, no one knew who to call for the meeting. The question was is FIA enough," added this person who asked not to be identified.

Meanwhile, FIA also seemed to be facing a funding crunch.

“Further to the FIA’s repeated requests conveyed to the member we have still haven’t received the desired response for holding FIA meeting. FIA financial health needs urgent intervention from the members," FIA wrote in an e-mail on 30 July. The email, reviewed by Mint, was marked to Air India chairman Rohit Nandan, Jet Airways’ Naresh Goyal, IndiGo’s president Aditya Ghosh, GoAir CEO Girogio De Roni and SpiceJet’s chief operating officer Sanjiv Kapoor.

It was not immediately clear whether all of FIA’s members have paid their annual membership fee of around 10-15 lakh each. A GoAir spokesperson said the airline has “paid the annual membership for 2014-15 and we also made an additional contribution last month" . A SpiceJet spokesperson declined comments on the subject.

E-mails sent to Air India, Jet Airways and IndiGo remained unanswered.

Indian airlines have lost a combined $9.8 billion over the past seven years, according to aviation consultancy Capa Centre for Aviation and most remain loss making in a market that expanded by nearly 4% last calendar year in domestic traffic.

Air Deccan founder G.R. Gopinath insists FIA is cartel.

Gopinath, who refused to join FIA when it was formed in 2007, said the body is now “behaving like the old Bombay and Calcutta club of the licence Raj period lobbying against competition forgetting they are children of reforms".

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Published: 02 Sep 2014, 12:06 AM IST
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