If you remember, just few years back if somebody wanted to travel by air then it was big thing because air tickets were very expensive and only very rich people could afford those. Now in today’s times we see that any Tom/Harry is travelling by planes. What happened suddenly? How is this happening? Who is real gainer and who is real loser?
What I have understood is only beneficiary of more people travelling by planes are aero plane manufacturers (there are 2 to 3 companies only). Countries like India have little good rail network and people used this mode of transport for years as it is cheaper and long-distance trains are available. On the other hand, flight tickets were very expensive which only rich could afford.
Simple rule of business says If you want to sell anything then there must be demand in the market for that product and to sell more and more planes, manufacturer need its demand, means more and more people must travel by flights then only more and more airlines will give orders for more and more planes. Why will people travel by planes if they have cheaper train options? There are various ways how it is achieved.
First thing is move away people who are travelling in trains in higher classes (by paying little more money than ordinary classes) towards flights. Its done by increasing its fare constantly and making flight fares cheaper at the same time. If one sees now, fares of first class in trains are equal to or expensive than flight ticket. After 2014 infact all types of AC coach fares have almost doubled and on few trains dynamic pricing has been introduced which is further expensive. At the same time over the years absolutely no investment has been made in upgrading trains and rail infra whereas huge taxpayer money has been put in developing and modernizing airports. If one goes to airport and train station in India then can immediately make out the difference.
While travelling in long journey anybody would like to save time and high-speed trains and flights are the best option for this. If one sees, there is hardly any long distance high speed train in India then if one wants to save time then only option left is flight. Now government is trying to build one high speed train but that to for short distance and that too by spending humongous money.
Question comes how come flight tickets have become so cheaper? Simple answer is airlines are selling those at extremely cheaper prices. Next question comes, planes are very expensive, they have limited seats (can’t carry 700-800 people like trains), their maintenance is very expensive, airports fees are higher, aviation fuel is expensive then how come they are selling at such low price? Are they making any profits? Answer is No. Most of the airways in India are making good amount of losses. Then question comes if they are making losses then how come they are running business because you need money to run it. Answer is loans, yes they are getting loans from banks for most of their operations, right from plane purchase to day to day working capital most of it is coming through banks. Then one must think how come banks are lending them if they are making losses and what the hell is mortgage? This is the question where each one of us must tumble after deep diving into it. At least I don’t think that loans are given after security and depositor’s money is not at all safe. Recently one of the airline’s owner went bankrupt and he ran away to some other country and did not pay any loans of banks. Those loans are NPAs for banks. Banks are giving loans from depositor’s money which is of Indians.
Under such scenario, why will people travel by trains when they have equally priced flight option available where people can save time and experience great infrastructure of airports. As increasingly more people travel by Air, airlines need more and more planes. In order to purchase those they need more and more money which is given by banks from people’s very own deposits! More and more they give orders to aero plane manufacturers, more and more money is made by these manufacturers. Basically, these manufacturers are making money through Indians pocket which is coming to them in the form unsecured loans.
Not only this, now these guys are not satisfied by this, now they want more demand of planes, so in India government is developing airports almost at every city and government is asking all airlines to fly people at cheaper prices. This will result in furthermore demand and that is how one of the airline’s spokesperson was recently informing that India needs almost 2100 planes in near future! Imagine amount of money which will flow towards them!
Now what will happen if airlines go bankrupt and unable to pay back loans? Bankers will have huge NPAs, in such scenario either government will bail out banks/private airlines (from taxpayers money) or bankers will not return people’s money and banks will go bankrupt!
Question comes to mind is, Do so many people running these things have hand in hand – Aero plane manufacturers, airlines, bankers, politicians? Looking at the history and current situation at least my mind says Yes to this. We as Indians must ask many questions to government and keep our money safe!
Indians in air
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