Monday, September 27, 2021

Competition will ensure failure of few in industry: Dr. Barry, at CAPA India webinar

by Staff Correspondent

Lately, CAPA India organized a webinar to review the consumer interests and competition issues in Indian Aviation. Amongst top priorities for India aviation, one should be establishing a clear policy on competition (ideally as competitive a regime as possible) and another must be introducing consumer protection laws with oversight by an independent body, stated Dr Barry Humphreys, Aviation strategist and regulation expert while addressing the participants in the webinar organized by Capa India on Tuesday.

Adding to his say further, Dr. Barry explained that, “aviation liberalization has been set back in recent years, reflecting general backlash against globalization. Many carriers that survive will be indebted, often to governments. This may lead to more protectionist policies.”

According to Barry as of 31-Mar-2020 the cash balances of Indian carriers other than IndiGo and Vistara covered only around 50% of their liabilities related to advance ticket sales.

“In FY2020, it is estimated that passengers received only just over 40% of the compensation to which they were entitled for denied boarding. Whereas, in FY21, issues related to refunds were the leading reason for airline complaints (58.8%), compared with just 2.6% in FY20,” he further added.

In FY20, Indian passengers received an average of INR 130 compensation for denied boarding, cancellations, and delays, while UK had INR 38,000, he shared while speaking in the webinar. According to a renowned aviation strategist India needs to have a national competition policy – as a part of structural reforms initiated by the PM of India. Until then, the aviation ministry needs to have a strong & dedicated team focused on competition/consumer interest issues.

He also emphasized on the fact that failure of some airlines is primarily for the protection of consumers. “As, most countries are going through solvency tests for airlines, and these tests will not be able to stop airlines going bust. Competition in industry assures the fact that some will fail, and some will be successful,” he expressed.

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