They Don't Really Care About Us

While scandals on government corruption never seem to end, it has been useful for the personnel of our The State to find an excuse to point to private-sector "greed" - and thereby portray themselves as our "protectors" from that greed.

The case in point is about our new private airlines. There isn't a single Indian who would prefer a return to the days of State monopoly over domestic civil aviation. Yet, because of the fact that some of their "spot fares" - that is, on tickets booked shortly before departure - seem too high, our minister for civil aviation, Praful Patel of the NCP, has been making some very strange noises. According to this news report, the minister is "setting up an economic advisory council, which will meet on 10 December to discuss what are reasonable fares." In the same report, the minister makes this claim in support of his interventionism: "We are here to help the sector to grow while keeping in mind interest of the passenger."

For one, the huge taxes being levied on air travel disprove this grandiose claim. These taxes are, in fact, screwing the passenger. They keep our unsafe railways afloat - who deserve to be out-competed.

Second - the ministry continues to bar the entry of new players. The only answer to high fares is competition. That is, the only counter to one company's greed is the greed of other companies. The greedy State will only make things worse.

Third - in the field of civil aviation, our The State is very much a greedy player. This minister runs Air India and Indian Airlines, and their various off-shoots. Because their losses are covered by the taxpayer, these State-owned airlines offer "unfair competition" to their private sector rivals. In a free market, they would have folded up long ago.

Thus, the passenger-taxpayer is being doubly screwed. The State must therefore exit civil aviation completely. Thereafter, the sector must be completely de-regulated. Only then can the "interest of the passenger" be served. Indeed, the poor Indian passenger would then probably be served a drink after take-off - something our The State prohibits today. Triply screwed!

The most inspiring story of de-regulation of civil aviation comes from the US. They used to have a Civil Aeronautics Board (CAB) that not only regulated fares, but also awarded routes. Market principles did not work at all - and political graft ruled the roost. Anthony Sampson's history of the early years of civil aviation Empires of the Sky: The Politics, Contests and Cartels of World Airlines (1985) noted that, with the CAB, airlines had a "murky relationship with the US President."

Then, in 1977, along came Jimmy Carter with different ideas. He installed Alfred Kahn, an economist, as head of CAB. Kahn did the unthinkable: he de-regulated the CAB out of existence! No more CAB! This "father of airline de-regulation," as he is now known, brought into being a host of "low cost carriers" - like People Express and Southwest Airlines. Kahn inspired Europe - and the Thatcher era saw Freddie Laker taking on the "Big Five" with his SkyTrain across the Atlantic. The rest is history.

We in India need an Alfred Kahn - not this NCP man, Praful Patel, with his double-speak.

Praful Patel hails from a political family - his father was a prominent CONgressman. His constituency lies in Gondia, in the poor Vidarbha region of Maharashtra. He is also big in business - a sort of "bidi king." These business interests have since diversified - into pharmaceuticals, real estate and packaging. This apart, he also runs the "Gondia Education Society" that, according to his profile on the party website, "imparts education to 80,000 students in all disciplines ranging from Arts, Commerce, Engineering, Law, Pharmacy, Information Technology, and Computer Sciences."

According to Wikipedia, Praful Patel is "a former Director of Jet Airways."

Methinks we need an Alfred Kahn.