Case Study: The Indian Scene, circa 1975
Typical scene at metro airports in the early years of Indian Airlines : DC-4 on the tarmac as DC-3 takes off
So what has changed ? Vayu flies readers back to the early 70’ s on India’s endeavor to launch regional air connectivity services at a time when the then Indian Airlines summarily closed 16 of 70 stations because of non-viability of those air routes. Have the lessons been learnt ?
So, what has changed ? Vayu Aerospace Review flies readers back to the early seventies on India’s endeavour to start regional air connectivity which rationale was understood and promoted for nearly a decade before Vayudoot, India’s regional or third- level airline, came into being in January 1981. Successive ministers for civil aviation had periodically announced that the government was studying the possibility of establishing such air services to link hitherto unconnected points, particularly in the North-East, that various options as to the kind of air carrier were being examined and that various suitable aircraft types were being evaluated. In fact, it was after the fifth successive committee’s report that such an airline took formal shape, assumed a name and began air services, albeit with borrowed feathers so to speak. It was upto the sixth committee to select the most efficient and cost-effective aircraft to match the nation’s objectives.
Read on : As stated in Indian Airlines’ Annual Report for 1974-75, the Corporation achieved the transformation of a budgeted loss of Rs 16.5 crores to a surplus of Rs 1.01 crores basically because it revised the route system that resulted in the closure of 16 out of 70 stations (emphasis added) and re-deployed its aircraft to sectors where the demand, and hence the earning potential, was greater. Hence, the overall load factor of 66.5% was exceeded by two points, closure of the sixteen stations and augmentation of capacity on routes with higher traffic potential resulting in a net reduction of Available Tonne Kilometres by 7.1% but an increase in Operating Revenue per ATKm. by 15.3%. Yet, as the Report continued, “the Corporation was not guided only by the profit motive and continued to operate
certain uneconomic routes as an obligation to provide air services in the country as a whole and for regional development and the growth of tourism”. Notwithstanding, sixteen stations were actually closed down and Indian Airlines refused requests for operation of new services or to modify existing routes when the change would increase its financial burden.
Now, who decides on the overall interests of the nation? The annual balance sheet of a public sector undertaking ? The preamble continued: “The nation is striving to accelerate its economic development and de- centralisation of industrial and commercial concentrations is an avowed aim. Transport and communications are vital factors not the least because they support such growth but are an obvious link is the great task of national integration.”
Government of the day had decreed that “If the state-owned airline is unable to justify operations to remote or inaccessible parts because of economic considerations which directly relate to existing overheads, a solution can be found in allowing private or quasi-Government organisations to take over this responsibility.”
There were many private carriers and State Governments both willing and capable of providing such services efficiently and safely. Recall the efforts of Jamair in the North and East, Safari in the West and The Hindu in the South during Indian Airlines four-month ‘lock out’. And these services were willingly extended, albeit under the constraints of operating elderly and uneconomic DC- 3 Dakotas. “For many years now these and other potential operators have applied for permits to serve stations not on the IA network. All these have, unhappily, come to naught not because the proposals were unattractive, but because the powers that were remained indifferent or constantly changed their policies to suit the hour, or simply, disliked taking a decision.” Meanwhile, the nation was denied this input to economic gain.
A New Year Gift
A new year gift on 2 January 1976 came in the form of a public statement by the then Minister for Civil Aviation announcing that the Government had offered nine select routes for operation of passenger services by private airlines. Proposals were invited and it was hoped that a final decision would be taken within the year. Also mentioned was that “a search for a suitable third-level aircraft for operating on the feeder and sub-feeder routes, was in progress.” Also that, Indian Airlines would not need to examine such aircraft, leaving the choice to the party involved and whose consideration would be dependent upon the infrastructure of the area selected and not the least, upon guaranteed Government promotional policies like subsidies and fuel tariff reductions.
For some years too, various official bodies and institutions had conducted surveys and examined the requirements for third-level air services in the country. Then, in 1974 the Ministry of Defence commissioned a study on the feasibility of developing and manufacturing a transport aircraft indigenously to meet the requirement of both civil and military needs. Traffic forecasting studies were a preliminary necessity and this went into great depth in surveying the pattern of transportation – and latent potential. The Study Group, composed of members from the DGCA, the Air Force, Indian Airlines, Department of Defence Production and Hindustan Aeronautics, submitted its recommendations in June 1976. The conclusion was that a third-level air service network was essential, viable and practical. “The services must, however, be directly stimulated by pragmatic promotional policies and the industry could be put on its feet during the formative stages by necessary subsidies. The Indian aeronautical industry has the expertise and means to design and develop a suitable aircraft to meet the requirement.”
The Rationale for Regional Air Services in India
The study continued : “In 1974, India has a population of near 600 million ( 1.2 billion in 2017 !) and while eighty percent are scattered amongst 576,000 villages, nearly 110 million live in 2650 cities and towns. The land mass measures 3,287,782 sq km and there are rail links covering over 60,000 kilometres and surfaced roads totalling 1,150,000 kilometres. Much movement takes place by rail (estimated at 7.5 million passengers per day) and road and the lack of air links makes any study of potential volume of air travellers necessarily speculative, but the absence of air traffic at the third level at present cannot obviously be construed as lack of traffic potential.”
“Still, it would be necessary to lay down certain criteria and parameters in order to identify the potential that remains untapped. Any proposed network should take the following into consideration: the basic element would be cities and towns with existing airfields and these include those on Indian Airlines network all towns and cities with a population over 80,000 should be included intercity distances could be prescribed by a lower bound of 50 km and upper bound of 500 km, the former being assumed as the cut off distance below which air travel is unlikely or unnecessary except where surface transport is non-
existant such as in the hilly tracts of northeastern India.
A study by the DGCA reportedly established the existance of a definite potential of 92 sectors but, taking the above considerations into view, the list could cover 172 cities with an associated set of over 2,300 city-pair connections.
There were other factors, of course, like population, habits, income levels, growth of industrial production, affinity parameters, inter modal travel time differentials between the city-pairs and a host of others. Owing to the near complete absence of historical statistical data relating to third level air traffic, no extrapolation of past data into the future is possible especially when a quantam jump could be natural when the numerous virgin city-pair connections at the 3rd level are considered.
Perhaps the closet correlation that could be employed would be through a time series analysis of the distribution of passenger traffic on the railways (Air Conditioned and First Class modes) and by private automobiles, taxis, or deluxe buses on highways between city-pairs. Market surveys have been carried out by the National Council of Applied Economic Research (NCAER) in Maharashtra, at this State Governments request, and a limited survey was conducted by Karnataka and these have indicated the existance of very high traffic potential on the chosen routes — but not operated by Indian Airlines.
The Tentative Start
Management of the then Indian Airlines had often expressed that many of their regional routes were “uneconomic and it may thus be profitable for IA to shed most of these and concentrate on the trunk routes. The regional routes so shed could then form the basis of the proposed nation wide third level air network to link the far flung corners of the country and these may be operated by several agencies, in both public and private sectors.”
This was rational and would bring about several benefits. Firstly, increased profitability for Indian Airlines, secondly, and more important in the national context, the establishment of fast air links to remote or in accessible parts, fostering accelerated economic development and enhancing national integration. The fact that rapid communications established and available would mean a relief of industrial and commercial congestion, presently centralised. Large numbers of aircraft plying between outlying areas would have a direct fallout in terms of an enlarged sophisticated technical base; a host of manufacturing and overhauling facilities would spring up all over the country to support such aeronautical hardware and this would stimulate self-reliance in this field.
Finally, and not the least important, such a network of air services and maintained airfields, would result in an enhanced degree of national security, for both external and internal contingencies making it practical to rapidly deploy armed forces in far flung or hitherto inaccesible areas. “It is hoped that the early eighties will witness the establishment of third-level air services, linking scores of towns throughout the country. Firstly, reactivating the stations ignored by Indian Airlines and, increasingly, bringing a hundred new points on the air map of the nation.”
Thus the advent of Vayudoot
Described variously as the fastest growing air carrier and earning the sobriquet of the world’s “biggest little airline”, the year 1986-87 was termed as one of mighty expansion for Vayudoot but also one which required a sober period of consolidation thereafter. Undoubtedly the world’s most widely operating commuter airline, Vayudoot came in to its own with receipt of the first Dornier 228 regional airliner in December 1984. Within the first few months of 1985, the third-level airline had added 14 additional stations to its network, taking the total served to over 30. By the end of 1985, Vayudoot was operating to 50 stations in all four geographic regions of India and with its fleet of five German-supplied Dornier 228s augmented by another five assembled by HAL, plus transfer of seven HAL-BAE 748s and F.27s from Indian Airlines, the carrier continued to add new stations throughout 1986 and early 1987 to reach the figure of 87 points served by the autumn of 1987.
Deliberations and Decisions
But, before embarking on the next expansion period, “it would be necessary to review the rationale and imperatives which laid the foundations for India’s third-level or commuter or regional airline.”
The rationale for feeder air links within the vast country was understood and promoted for nearly a decade before Vayudoot, India’s regional or third-level airline, came into being in January 1981. Successive ministers for civil aviation had periodically announced that the government was studying the possibility of establishing such air services to link hitherto unconnected
points, particularly in the north-east; that various options as to the kind of air carrier were being examined and that various suitable aircraft types were being evaluated.
In fact, it was after the fifth successive committee’s report that such an airline took formal shape, assumed a name and began air services, albeit with borrowed feathers so to speak. It was upto the sixth committee to select the most efficient and cost-effective aircraft to match the nation’s objectives.
Most of the deliberations took place through the seventies. In 1974, the government had set up a multidiscipline committee under Vivek Sinha (later Additional Secretary DRDO) to not only examine the requirement for such feeder air links but to identify places to be air-connected, quantify the size, type and number of aircraft required and, finally, determine whether the indigenous aircraft industry was capable of developing and producing such an aircraft in the numbers required.
The answers were clear: the country required such regional air links for social, economic and strategic reasons, over 50 points throughout the sub-continent would eventually justify air services and considering the multi-purpose employment of a 18 to 20-seater light transport aircraft, well over 100 aircraft would be needed. Hindustan Aeronautics Limited had the expertise and resources to undertake this national task.
Even as the Design and Development Bureau of HAL, under the direction of then Director D&D SC Das, started preliminary design studies for such an aircraft, eventually labelled the HAC-33 in 1976, the domestic carrier Indian Airlines nominated their Planning Manager, JK Chaudhuri, in 1977, to initiate an examination of third-level traffic potential; identify city-pairs to be connected, frequency of operation and the likely type of aircraft that could fulfil the needs. Both reports were positive in their conclusion, and became the springboard for a simultaneous approach towards the objectives of creating third-level air links and having an indigenous aircraft to serve them.
In May 1978, Hindustan Aeronautics Ltd and Dornier of West Germany, signed a Memorandum of Understanding to design, develop and manufacture a light transport aircraft incorporating the ‘wing of new technology’ evolved in Germany, with potential to grow from the optimum 19-seater category to a 24-seater and eventually to a 30-plus-seater class. Dornier were a highly respected company with roots in aviation history and having at the time a similar study for 19-24 seat light transport aircraft on their drawing boards. A large number of design engineers from HAL were nominated for joint studies with Dornier at Friedrichshafen on the Lake of Constance in Southern Germany in mid- 1978 and positive recommendations were framed for the Government’s consideration.
Simultaneously in 1978, India’s Civil Aviation Ministry constituted the Gidwani Committee to examine the manner in which the proposed third-level operations could be started bearing in mind the requirement of different regions, potential traffic and priorities, and whether Indian Airlines, or a subsidiary or a separate public sector corporation or a joint sector corporation should be entrusted with the responsibility. Further, the Gidwani Committee was to review the minimum developmental work required at airfields to support such third-level air operations and also shortlist the most suitable aircraft types from the technical and economic points of view. Finally, the Committee was to project estimated financial results and whether the third-level operations could be subsidised by grants from the government until such time as they became self-sustaining.
As there was little coordination with HAL at the time, the Committee restricted itself to examining those small passenger aircraft as were available in the world market and, in fact, the DHC- 6 Twin Otter from Canada, the N-24 Nomad from Australia and later, the Short Skyvan from Britain were evaluated in typical terrain and conditions particularly in the NorthEast. “The results were not spectacular”. In its view apart, the high-level National Transportation Committee proclaimed that third-level air services would not be considered as priority except in the difficult North- Eastern area. This view was not necessarily unanimous.
However, at the government level, there was still no coordinated effort with HAL which continued on studies of their own, taking a far more broad view on the requirement for such category of light transport aircraft, with a number of defence services, as well as various Public Sector Undertakings in need of a similar class of aircraft by the mid-80s. These included the Indian Air Force, the Navy, the Coast Guard and para-military services.
Actually, the Ministry of Civil Aviation constituted two more Committees in 197980 with nearly the same terms of reference as had earlier been entrusted to Gidwani: the Zaheer Committee, followed by the Braganza Committee, were tasked to make recommendations regarding the nature, type and size of aircraft, to identify the stations, other than the North-Eastern ones, which should be covered by third-level air services, assess the number of aircraft required to serve the stations and to recommend the airfield infrastructure required so that the entire country could be covered in phases over three years. The Braganza Committee submited its report late in 1980.
Clearly, this too, fell short of what the government desired: a larger view had to be taken, bringing in the requirements not only of the proposed third-level airline, but also of the multifarious operators of such category of light transport aircraft in the country and, vitally, the involvement of India’s aircraft industry in such a programme.
Thus, in early 1981, the Menon Committee was constituted, with members nominated from the airlines, (Capt Kamni Chadha, Chairman, Indian Airlines), Air Force ( Air Marshal Kapil Chadha, AOC-in-C Eastern Air Command) and industry (Mr J Bhandari, Chief of Planning, Hindustan Aeronautics Limited and later General Manager, Kanpur Division). The Menon Committee had extensive discussions with potential operators of such light transport aircraft, studied the size and performance parameters and worked out projected requirements till the end of the century before drawing a list of all available aircraft types then existing : British, Spanish, Canadian, West German, Czechoslovak, Brazilian, American and Australian. Various criteria were applied to each aircraft and four were eventually shortlisted for extensive technical, operational and financial evaluation: the Short Skyvan, Casa 212, DHC-6 Twin Otter and Dornier 228.
Nearly two years of examination, flight evaluation to the farthest limits of performance and intensive commercial and industrial negotiations followed before the Government of India confirmed, in August 1983, selection of the Dornier 228 as India’s choice of light transport aircraft for Vayudoot, the IAF, the Navy and Coast Guard plus other operators.
Douglas DC-4 Skymaster of Indian Airlines