Thursday, September 13, 2007

Aeronautics Commission

[Posted on my Previous Blog : Dated 4th October, 2005]
On the 3rd Oct,2k5 issue of The Hindu , an article "The case for an aeronautics commission" is published. It discusses about the present condition of aeronautical industry in India, the cause of its poor state and the scope for future. The article begins with the vision of developing an aeronautics commission and its prime task ie to develop a 150 seater civillian aircraft. Well the vision is of Dr APJ Abdul Kalam Azad. But I am here to raise another point.
Aeronautics industry demands a huge input in terms of money and up to now the demand used to come from Indian Air Force(AI) and Air India/Indian Airlines(AR). So naturally it has been a government monopoly. But many may not be aware of the fact that the first aircraft manufacturing unit was a private company and so also the first air liner. The credit goes to the vision of Seth Walchand Hirachand and JRD Tata. But after independence govt of India took charge of both the companies and since then it has been a govt monopoly. Recently the skyways are freed for private parties and we are watching the rise in civillian air liners eg Air Deccan, Sahara Airlines, Spice Jet,Jet Airways to name a few. So why not govt goes for the privatisation of HAL?
No monopoly industry can grow due to lack of competition. And at present there is HAL with its various branches are the sole manufacturing and overhauling units. With the fall in the air fares and the growth in economy, many people are finding air travel within their reach. And there is a huge rise in the aircrafts. So will be the rise in the demands for both manufacturing and overhauling of aircrafts. Manufacturing of a complete aircraft demands huge investments, but not maintainance. Simillarly with the abundance of minerals along with low labour costs Indian companies can capture the market of aircraft parts like they are doing successfully in case of automobile parts. Manufacturing of parts separately will demand low cost and less reasearch work. DRDO has failed miserably in developing Kaveri and is now seeking the help of GE. So why in case of engines only? Rather govt should privatise HAL and give contracts for development and production. US govt does the same and we have many private aeronautical industries in US eg Boing, Northrop Grumann, Lockheed Martin etc. With contract system there will be compition among various companies leading to the production of aircraft parts with low cost and better performance. So its time when govt should privatise HAL and give contracts to private companies for development, production and overhauling of both civillian and millitary planes. L&T has already set up its Aircraft unit. So if govt takes +ve steps then we may see big companies like Tata or Reliance entering this field.
If govt takes suitable steps then no doubt we can find a dynamic aeronautical industry in India.

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