A Second Chance

From Vayudoot to UDAN, 25 Years on

In this critical review, Vayu takes readers back 25 years when the first bold moves were made to introduce regional air connectivity in India. This resulted in establishment of Vayudoot which got off to a rational start with rational commuter airliners (Dornier 228s) but whose original imperatives were abandoned by those incharge, resulting in its ignomious end.

When the first bold moves were made to introduce regional air connectivity in India over a quarter century back, the then Government logically relied on the professional background and experience of DGCA, Indian Airlines and Air India to ensure that the special entity formed for the purpose (eventually Vayudoot) would be suitably managed. Unfortunately, there was some indifference or even prejudice amongst these organisation, mostly owing to gross ignorance of realities. It is therefore appropriate to review the lessons learnt which will impact on the success – or otherwise – of the latest efforts to promote regional air connectivity in India, alias UDAN.

The raison-de-etre of India’s first true third level or commuter airline, Vayudoot was not really appreciated 25 years back, thus its inevitable financial losses which became the main reason for its untimely closure. Laying the blame on the logically selected regional airliner and all the other arguments voiced in respect of the airline or its Dornier 228 fleet, were peripheral and used only to camouflage what was gross mismanagement.

To understand the situation vis-a-vis Vayudoot and its Dornier regional airliners, it is necessary to go back in time to the years before this third-level airline was formed and the Dornier 228 aircraft selected by an experts’ committee appointed by the Government of India. It is also true that every time an aircraft from Hindustan Aeronautics Limited is manufactured, then that specific aircraft becomes the target of general criticism, and this too was the fate

of HAL’s Dornier 228 regional transport aircraft programme.

But going back some decades earlier, in the early 1960s, HAL had initiated manufacture of the Avro (later Hawker Siddeley and still later British Aerospace) 748, in technical collaboration with the British aircraft and its engine manufacturers. These aircraft were essentially acquired and subsequently manufactured to meet requirements of the Indian Air Force. In view of the need for a similar aircraft type for Indian Airlines, the government determined that the same Avro 748, delivered from HAL should fulfil this need which precluded further purchases of the Dutch- origin Fokker F-27s. In order to help in the sale of HS 748s to Indian Airlines, these were actually subsidised by the Government such as to make the HAL delivery price equal to that of the imported F-27.

It is a fact that Avro 748 deliveries from HAL were not taken kindly by either Indian Airlines or the private-sector suppliers of ancillary equipment and services for reasons not necessary to amplify upon here. Compounding this was an appalling lack of product support by HAL and its “inability” to appreciate economic practices of the civilian market, which soon gave Indian Airlines, and others, the excuse they needed – and used – to obstruct further deliveries of the Avro 748 from HAL. In this devious game, the Indian aviation industry particularly and the country generally, become the loser.

In stark contrast were the examples of Indonesia and Brazil, whose respective Governments had decreed that their national airlines would procure civil airliners only from the national aeronautical industry. IPTN-Nuritanio and Embraer thus flourished, with the Indonesian and Brazilian national airlines operating NC212s and CN-235s with the former and Banderainite and Brasilia with the latter.

Notwithstanding these obstructions, originating from various sources, HAL’s HS 748 production programme was not altogether unsuccessful. If nothing else, it was a catalyst in developing selfconfidence within HAL, sufficient for it to initiate a number of design studies for the indigenous development of turboprop transport aircraft (the 24-seater HAC-33 being a case in point). By the mid-70s, HAL was well positioned to launch and actively pursue this regional-airliner design and development programme. The fact that this metamorphosed into the HAL-Dornier 228 (and the future 328) is another story.

At about that time ( the mid ‘ 70s), Indian Airlines was operating a mixture of jets and turboprops in its fleet, with a dual fares structure (one for jets and a lower one for turboprops), apart from the Eastern Sector where the fares were even lower, but incurring heavy losses on its turboprop network. The jet fleet (Boeing 737s and Caravelles) actually cross-subsidised most of the turboprop operations.

The mid- 70s were also a period of turbulance for Indian Airlines. Industrial disputes compounded by management ineptitude and rivalry for succession invited political interference, which in tum led to the irrevocable weakening of long established institutions, within and without the Airline.

Political instability, the presence of extra constitutional centres of power, the break-down of institutions took place in Indian civil air transport from 1975-76 onwards. Vayudoot was created under such circumstances and with its launch in 1981, Indian Airlines was helped to ‘painlessly’ get rid of the loss-generating part of its

operations. Henceforth, the financial year ending would bring few sleepless nights to the financial managers of Indian Airlines.

Another act in this play was being enacted elsewhere. A group of well meaning professionals, with hopelessly inadequate resources at their disposal, were examining (demi-officially) the third-level air transport market in India, its extent and its requirement of “small passenger aircraft.” With the limited data at their disposal, however well-intended, this study unfortunately soon became the point of reference for all future work on the subject of third-level air links in India.

About this time, the defence and paramilitary forces too were examining their requirement of light transport aircraft for a number of different roles, which varied from personnel transport and light logistics support for the Indian Air Force to long endurance maritime surveillance by the Coast Guard, to a multi-role Naval warfare capability for the Indian Navy. The National Airports Authority wanted a suitable platform for calibration of ground nav-aids etc., the Directorate of Science and Technology for weather related research, the National Remote Sensing Agency for its surveys and the ONGC for executive transportation.

The Government was aware of these demands for a national light transport aircraft and set up committee after committee ( Sinha, Gidwani, Zaheer, Menon, and so on) but then procrastinated. The objective was that a common aircraft type be chosen to suit the requirements of the various agencies, so that the cumulative numbers of aircraft thus determined should by such as to launch an economically viable manufacturing programme in India.

The Menon Committee was the last of these many Committees, and included senior officers from the Airlines, Air Force and Industry. The consensus choice was for the German Dornier 228, selected from a long list of contenders, which included the Canadian Twin Otter, the Spanish CASA 212, the American Beech 1900 and the British Shorts Skyvan. The Committee ruled that of the competing aircraft, the Dornier 228 came closest to fulfilling the specified roles, as laid down by the various potential operators. The choice was to be optimal for the cumulative demand. Moreover, Dornier’s technical and commercial terms of collaboration for manufacture and comprehensive technology transfer were “superior than those offered by the competition”. It was also recognised, and justifiably, that in order to encourage the growth of the indigenous aircraft industry there should be potential for further development of a 30+ seater and entry into the export market.

To put the matter in its proper perspective, from a production run of some 150 units which were contracted for, the delivery programme for the civil market ( Vayudoot and others) was less

than a dozen aircraft, with a further score or more possible. The additional deliveries earmarked for the civil market were intended to encourage HAL to develop its civil marketing expertise and infrastructure.

Since many believed that the woes of Vayudoot were partially due to either the “poor despatch reliability” of the Dornier 228 aircraft or to its “bad economic performance” or both, these aspects needed to be looked into before Vayudoot’s performance itself is examined.

There were at the time well over two hundred Dornier 228 aircraft already in worldwide service with some 74 operations in 17 countries. The average global technical despatch reliability of this aircraft was 99.7 per cent with some operators achieving 100 per cent. In contrast, Vayudoot’s despatch reliability achieved never exceeded 97 per cent or thereabouts. Nevertheless, even while the Vayudoot on-time performance was poor in comparison, it still managed to achieve one of the highest utilisations in the world, some 207 hours per month on its Dornier 228 aircraft ! The reasons for the below-average performance of the Dornier 228 in Vayudoot’s fleet were therefore to be found not with the aircraft but elsewhere - perhaps with the manner Vayudoot which about conducting its business. Even Druk Air of Bhutan had performed as well or better than the world average and the Indian Coast Guard had achieved much better results.

The original purpose for which Vayudoot was formed (at least as far as the Government of India was concerned) was to airlink nationally strategic areas with the rest of the country and to provide adequate transportation in those areas where other modes of transport were inadequate and difficult. With Vayudoot performing a socio-strategic role, commercialism or profitability played little or no role in the original plans for India’s third-level air transportation. Even though the original plan did not expect ‘commercialism’ from Vayudoot, this was not intended to be a license for gross mismanagement. Unfortunately, in an environment which became increasingly casual on professionalism and soft towards individual self-interest, this very latitude was made use of by a coterie, consisting of the then Vayudoot management, the bureaucracy and some politicians, at cost of the future.

So, when a myriad of difficulties began to raise their heads and costs to the national exchequer began to mount, scapegoats were invented. First, it was the aged fleet of the HS (Avro) 748 and Fokker F.27s then the “uneconomic” Dornier 228 aircraft, then it was Indian Airlines and its exhorbitant maintenance charges and finally, the very concept of this bold enterprise !

The tortuous tale of Vayudoot did not end there, and the commuter airline was forced to limp along as best as it could much like Delhi Transport Corporation! The limited size of Vayudoot was hopelessly inadequate for the genius of the powers-that were and so, according to the dictat, Vayudoot was to expand by co-partnering with Air India on its domestic operations. The die was cast !