Emirates is not interested in setting up a domestic airline in India right now, Tim Clark told Moneycontrol.
Reminiscing about the first jet flight he took in January 1960, Sir Tim Clark, President of Emirates, says that a privatised Air India will of course affect Emirates but says he accepts competition. In response to questions from Moneycontrol, Clark makes it clear that Emirates is not interested in setting up a domestic airline in India right now.
Edited excerpts:
Q: The government has allowed 49 percent Foreign Direct Investment in Indian airlines. Will you look at setting up an airline in India?
A: At the moment no. It (India) is probably along with China the most voluminous domestic market in the world. (But as you know) the Indian government controls the fares and they also have a tax on fuel which makes the whole economics a little bit marginal in my view.
There are issues there. But will we not get involved in that? No, we have enough things to do without getting involved.
Q: Air India is now being privatised. What kind of impact do you see it having on the Indian and global market?
A: I used to travel on Air India in 1958. It was the first Boeing 707 I ever flew on in January 1960. I was amazed that I as a kid of 10 getting on to a jet first time in my life and it was being operated by a carrier which was not BOAC but Air India.
In those days they had fantastic plans for what India was going to do. Do not forget it was only 10 years after Independence and their thinking was expansive, it was global. And after that well you know the rest is history.
When we started Emirates, Air India had 23 aircraft with a population size of 1.2 billion. They had an aero political network which was huge. And progressively over the years they have been unable to exercise the value of that aero political network by growing AI.
So they watched Emirates growing from 2 aircraft to 270 aircraft and then, of course, you see the likes of Qatar Airways and Etihad and all the others and the sort of morphing of the global economy go into whoop speed since 1995 and onwards and yet AI remained. And you saw the Indian economy explode.
Look at the value India brought to the global economy. The notion that you will have an airline of that size going basically… I am not being disingenuous to them …. They could have done a lot better.
If the privatisation of AI takes place and they are able to develop a business model that is meaningful and brings value to the new shareholders and to India, the scope and scale of that airline is endless.
And that is what they need to do.
Will it affect us? Of course it will affect us. But you know times change, you adapt and adjust. But this one is a bit of an outlier. They should have had a national carrier the size of Singapore Airlines or look at Emirates. Look at some of the big carriers like Lufthansa, Air France, KLM. But to do that you have to be liberal in your thinking. I accept competition.
Q: The Indian government is looking to revise the Air Services bilaterals. Is that a cause of concern to you?
A: Revising the bilaterals is one thing… Revising the bilaterals adversely is another. I do hope that the Indian government continues to grow its bilateral arrangements with countries that are bringing real value to India.
Q: Such as Emirates?
A: Yes. Why would you if they talk about revising the bilaterals upwards we are ready for that. We have said for ages that in our view these are the kind of risks that the Indian government has got to look at and allay, you could say because an open skies policy with regard to a population size of 1.2 billion in India and what is going on in India for the past 15 or 20 years suggests liberalism, certainly in air transport it will help what they were doing.
The multiplier effect of air transport and I just do not mean the people going in and out but the people you bring, the businesses you create, the movement of people in and out of India for all the reasons and segments that we know are artificially constrained today.
They are doing themselves absolutely no favours by keeping airlines out in my view. I have understood that countries are concerned about the well being of their aerospace sector or airlines sector. But at the same time, the greater good of the economy is the main thing that governments should be looking at. And they should be looking at the segments that will benefit from free and unencumbered air travel in and out of their countries.
(Ashwini Phadnis is in Boston at the invitation of the International Air Transport Association)
