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Taxes make Indian airfares 200%-300% higher than China says Goyal
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| 15/06/2012 02:23 PM |
India is the only country in the world to impose a service tax on their airlines and therefore airfares are 200%-300% higher than China and some other countries says the Jet Airways chief
Beijing: Air fares in India were about 200% to 300% higher than those in China and some other countries because of high tax rates, Jet Airways chief Naresh Goyal said on Monday, asserting that the aviation industry could not grow with such taxation, reports PTI.
"The Indian (aviation) industry can't grow with the taxes. In fact, India is the only country in the world to impose a service tax on their airlines. Do you know that the fares of Chinese airlines are a third of the Indian carriers? Why is it so? Because there are no taxes in China. In fact, the Indian fares are higher by 200%-300% if compared with the world's other carriers, leave alone Chinese," Goyal told PTI in Beijing.
Comparing Chinese airlines with their Indian counterparts, he said Chinese airlines were are all state-owned and "have solid government backing, not from now but for a very long time. The Chinese government doesn't tax their own carriers and there is a lot of state support to them".
Elaborating on Jet's expansion plans, Goyal said "we want to go to a few places in Europe and we are looking at those destinations which will make money like Paris, Munich and Frankfurt to name a few".
Regarding joining a global airline alliance, he said "we are in talks both with Star Alliance and Sky Team. Let us see what materialises. That is all I can tell you at this point of time".
Jet Airways was in an advanced stage of joining the Star Alliance earlier, along with Air India whose induction into the global airlines grouping was put off due to its precarious financial health.
Asked about recent reports that his airline was intending to buy 100 Airbus aircraft, Goyal ruled it out saying "we are only planning to induct four more A330-300 aircraft by early part of the next financial year".
To a question on government recently allowing Indian airlines to directly import jet fuel, he said "ATF import is of no use and we are not considering it. When you don't have the infrastructure to do so, it cannot be an option".
Kingfisher, SpiceJet and Air India have taken steps to go for direct import of aviation turbine fuel.
Though he has not favoured government allowing foreign airlines to pick up stake in domestic carriers, Goyal said he would welcome any such policy initiative by the government.
On the tremendous growth witnessed in the Chinese aviation market and lessons for India, the Jet Airways chief said "no, you can't compare the Indian market with the Chinese one. The two markets are different in the sense of the kind of travel that takes place in China, the purchasing power of the people and the kind of carriers that exist here. All are different from the ones in our own country".
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Comment
MDT 1 year ago
Thanks to all who have expressed their views here. However, we are finding that many people are using pseudonym or fake identity just to abuse someone or post nasty comments. In addition we are also finding there are too many 'vested interests', which are using this space. Therefore we have decided to close comments on this article. In case you still want to express your views kindly write to the Editor (mail@moneylife.in).
Regards,
Moneylife Digital Team
param 1 year ago
sucheta/veeresh, can you look at the comment posting module?
it certainly take a minute to write the message & when submitted, the message says 'security code does not match', so one as to refresh it by clicking 'Not readable? Change text'.
for fresh comment, this is tolerable, as your comments are still available, but for reply comments, your posting is just gone...
Geoffrey Leonard 1 year ago
Vereesh you really have no clue what you're talking about. Gunda and Binai are absolutely right. You're a disgrace to journalism.
malq 1 year ago in reply to Geoffrey Leonard
Dear Geoffrey, thank you for writing in, and maybe in a double negative kind of way you may have a point too. Go figure.
Having said that, I can understand how trying to open the rather secretive lid on a multi-thousand crore scam can excite passions not just in India, but abroad, too. Old tactic - when cleaning up the stables, make a lot of noise first - and see all the people who benefitted from the filth, get upset.
brgds/VM
geoff 1 year ago in reply to malq
my point still stands and that is you're a disgrace.
malq 1 year ago in reply to geoff
Dear Geoff - what a brave statement to make, from behind the curtain of anonymity. I guess brevity comes with the territory, in case the curtain shakes a bit?
As the saying goes - get well soon!!
rgds/VM
Binai 1 year ago
This article is entirely flawed. It is the AC classes that subsidise SL and UR, not the other way round. Unlike what is mentioned by the author, the Pantry car actually cooks food for ALL the passengers in the train. The author clearly has no idea of what happens in a pantry car, and has relied on half-baked information. The concept of cooking only for 1A passengers exist only in Rajdhani trains, where the food is "supposedly" better than the rest. In regular trains, the food items for all passengers are cooked on board - very few expresses have 1A. Trains without a 1A should NOT have a pantry car going by the authors' logic.
malq 1 year ago in reply to Binai
Dear Binai,
Thank you for writing in.
1) The AirCon classes do not subsidise the general classes - another train for which I have the data is the Sampoorna Kranti Express on the New Delhi / Patna route. Please take into account the higher costs for manufacturing these coaches, maintaining them and the extra running costs involved. We can continue to differ on this till the IR come clean with the real numbers.
2) I do have an idea of what happens in the pantry car - and the real reasons for its continuance. I have not written about the private trade in everything that the PC provides, for example - but does that reduce the fact? And if everything was cooked onboard, then what are base kitchens there for, at great cost?
3) By my logic, half the PC could and should be converted into passenger or running crew accomodation and the other area as the food assembly area. Cooking onboard, especially deep frying, to be reduced to the minimum.
rgds/VM
Binai 1 year ago in reply to malq
If you can prove with real numbers (not the inflated assumptions you presented in the original post) that a fully unreserved train is more profitable, then I'll accept your findings. The earning per km is much higher in AC coaches as compared to SL/2S/GS coaches. The garib rath concept proved that AC can be provided at low costs if it does not have to subsidise non-ac classes.
malq 1 year ago in reply to Binai
Exact numbers, Binai ji, are difficult, because configurations vary and so do other numbers. Also, this article is aimed at lay-people.
1) The Garib Rath concept works on higher revenue from high density AC 3T and 3x3 AC Chair Car configurations, with minimal running facilities, no free beddings, no pantry cars, no EOGs, and most of all, the higher saving on loco power needed due to lower drag. (non aircon trains with open windows have immense drag which require bigger/more powerful locos).
2) The fully unreserved rakes versus revenue from "standard" rake of H1 / A1 / B1 / Sl / Unreserved / High Speed Parcel Van versus Rajdhani / Shatabdi / Duronto calculation is far too complex - but on one head alone, the blocking of a scarce commodity like path on track, the calculations will show on a per km per passenger basis that in terms of direct money revenue, indirect costs applied and most of all cost of time for other trains which are slowed down as a result, some aspects of which are not tangible and will not matter to those who only look at the speed element without any other parameter - will show a 20:1 back of the envelope figure for 1AC:Sleeper/Unreserved fares.
rgds/VM
Binai 1 year ago in reply to Binai
About the pantry cars: If you have noticed (or ever bothered to do so), base kitchens are on a decline. Where ever base kitchens are present, they serve trains running without a pantry car, or serve meals for Rajdhani/Shatabdi Expresses.
This point of yours: "By my logic, half the PC could and should be converted into passenger or running crew accomodation and the other area as the food assembly area." proves that you have never been to a Pantry car. Half of the Pantry car is already reserved for accomodation of the pantry/cleaning staff. In some day trains, half of the pantry operates as a "Restaurant" where one can have food. There were trains which had passenger accomodation in one half of the pantry - which were removed after passenger complained of excessive heat.
And, you also prove yourself that you hardly have an idea of what happens when the train does not have a pantry car - passengers end up having to go without food when the train runs late or is route diverted. The former railway minister (LPY) had tried removing pantry cars from trains which resulted in passengers reacting badly.
Thanks for this article - really made me laugh. Please do continue writing such fiction stories which will help the audience have a hearty laugh.
malq 1 year ago in reply to Binai
Binai ji - yes, I've observed pantry cars of various configurations, going back decades. And I've seen contractual staff as well as other catering and sanitation staff sleeping in the vestibules and across the toilets - because the sleeping facilities in the PC are simply not enough.
The concept of half coach pantry cars (WLRRMAC) in the case of some trains, where the other half is a generator car, is not exactly unsuccessful.
The Garib Ratj trains without pantry cars appear to manage quite well, thank you - sure, pax will complain, but there is a trade-off in cost of ticket.
The pantry car/dining car debate is as old as the hills. Increasingly, it is being joined with the debate on the lack of quality/quantity of food served by the said pantry/dining cars. IMHO, since the IR is supposed to primarily provide a function to society also, the priority should be to move 70-90 passengers rather than lug a full coach around. Something like the concept of a no-frills airline vs a full-service one.
And I haven't even begun writing about the safety and environmental aspect as yet. But just a small hint - would IR agree to an audit, wherein pantry car contractors account for every gram of plastic they brought on board, like we do on ships and planes?
rgds/VM
R Murli Dhar 1 year ago
The biggest mistake Railways made was to ban authorised agents from Tatkal service, and then, limiting only one login through one ID only. At the suggestion of the Agent/s, the concept of ID proof at time of booking of Tatkal was re-introduced. Now if as an authorised agent were to make a booking in a xxx name with an xxx id proof, how can I ever find exactly someone of the same name, age, and ID proof !!! That is why Touts can command such high premia. Note that tickets can be transferred as per rules to anothe rperson in the family. Therefore the tout books the ticket, and in connivance with staff, later chane the name and ID of another sucker !! That's Y the high rates charged. Authorised agents bear the brunt of investment of nearly Rs 6K per year. Good wishes.
malq 1 year ago in reply to R Murli Dhar
A large proportion of the problems would be resolved if the various "quotas" barring the Emergency Quota were released atleast 24 hours prior scheduled departure time, since these are the qoutas that are played around with most - and it is like a cliff-hanger before the departure of the train, price shoots up in the last few hours due to connivance - even a w/l which is going to get converted into a confirmed in the due course of things becomes a big source of tension for the travellers since "charting" is often done just a couple of hours prior departure.
2) On TATKAL, it needs to be dynamic pricing for some percentile of seats.
The big issue is that these tout premium games are played out even when trains run at below 100% occupancy. THAT is the real issue.
rgds/VM
R Murli Dhar 1 year ago in reply to malq
Thank you for your comments.
1. Unfortunately, it is simply NOT possible to make quotas other than EQs available 24 hours in advance. There are cogent reasons for this. Any person below certain ranks in the IR have necessarily to travel at the last minute.
2. We may disagree/be upset/angry about the MP quotas, but they do too have problems at the last minute to reach their destinations. I have no problems with this.
3. As for the suggestion you make of a lottery, how will it help and how long should the lottery hold out ? It is just the Tatkal booking then. Frankly I am not in favor of this.
4. The mistake IR has made is that CK bookings today do NOT refund the money used to book it. So there is NO incentive for those who DONOT want to travel, to cancel the Tatkal ticket. This is especially true of EC, 2A,3A. Why bother to cancel when I am NOT going to get anything ? This leads to the next corruption level: The matter is now in the hands of the TTE... There is nothing known as 100 per cent turnout of all passengers. Therefore at least 10 seats in different classes would be vacant, and the TTE rules the roost. IR should have thought of this.
Good wishes.
param 1 year ago in reply to R Murli Dhar
"Any person below certain ranks in the IR have necessarily to travel at the last minute." - by this logic charting should be done at last minute, not 4 hrs before!!! it is even done by late evening for next morning trains. so the last minute travel is just a farce...
malq 1 year ago in reply to R Murli Dhar
Murli Dhar ji, Indian Railways is the property of the Nation. An Indian Railways staffer who has to move around as SOD (Staff on Duty) should be in the same priority as ANYBODY else who has to move around as SOD. The Emergency Quota (EQ) is supposed to cover emergencies.
And if there have to be quotas for certain categories, then let the utilisation be transparent, let the Nation know who/why utilised the quota and on whose recomendation. If it is "secret", then "secret" can be mentioned - but then, what percentage of work in India is now "secret"?
Much more transparency is required wrt quotas, simple as that. Think of the situation of the family on W/L, they have to leave home say 3-4 hours before the departure of the train but "charting" is done only 2 hours prior departure?
Somewhere down the line, governance in India has forgotten that it is here to serve the people - not rule over them. IR is on top of this, sadly.
rgds/VM
R MURLI DHAR 1 year ago in reply to malq
Thank you. First of all, I am also a family man, not connected with the Railways at all; but at heart I am a railfan, and observe closely how IR works. Let me tell you one thing straight: Charts for most trains are prepared in advance. We see this blip only during seasons. That said, there is a cut off point for all kinds of quotas, except the EQ. As far as I know, for day trains upto 1200 hours or earlier, the various quotas are released the previous evning around 1930 or so. For those on the same day of travel say afternoon it is released at around 1030 hrs max. For trains leaving late evening, it is 1700 max. You mentioned about one episode where the Admin was hauled up by the Authorities since the MP concerned was not allocated a berth (in a different article of yours). That shows that the system works on the right timing basis.
As for transperancy, I am unable to come up with a suggestion. Can you, or anyother person, more enlightened than me, come up with a workable suggestion > I will be grateful. Good wishes
param 1 year ago in reply to malq
my father's brother travels as 'staff on duty' almost daily - they don't use EQ - he is eligible for 2A as per rank & travels in whatever is available as per TTE, even in attendant's berth or with guard or loco driver...
EQ is relevant only for actual reservations, not for regular staff travel.
malq 1 year ago in reply to param
That is good to hear, Param - and since he is permitted to ride in loco, then he is obviously from the technical side of things. AND very senior.
On the other hand, there is no dearth of people with the red union card sticking out of their shirt pockets travelling all over the train in all classes too.
rgds/VM
param 1 year ago in reply to malq
if i had a real emergency, i would be happy to get a berth & would not really care to travel in 'comfort'. i believe this justification is enough to get rid of EQ in all classes except the lowest reservable one in any train.
malq 1 year ago in reply to param
An experiment being done by WR, of making the waiting/list "live", and keeping an extra coach in 3AC standbye for some trains, showed that by the time of departure almost every waiting list passenger had been cleared - even when w/l was, say, 300-400 in AC3T on the Delhi Rajdhanis.
The big issue here is the psychological fear of being left behind which pushes people on w/l to head for the touts - who in connivance with the commercial staff, know exactly how the w/l is going to move in the last few hours before charting.
THAT is the big issue - which can easily be solved with better transparency.
But if you look at the RTI response I got in the previous article, then you will see that the Board says it has no idea of what the zones/originating stations do wrt quotas. Which is so convenient.
rgds/VM
param 1 year ago in reply to malq
'making the waiting/list "live",' - could you please throw some light on this? i thought the wait list position on any train is always live in IR site...