Page 7 - IACC Newsletter March-April 2014 Issue 03

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In future, per capita disposable income in India will rise fast. But consumer affordability, a key sign of any mature utilities
market, will be determined only by healthy competition among airline companies. The main fear expressed by Indian
aviation companies is that foreign carriers will flood the market with cash, buy stakes and take over India’s skies. In reality,
like in other parts of the world, running airlines profitably in India is a challenge and some ventures have grounded. But, a
decade of competition at home has also resulted in some clear leaders that have operating standards and business
strength comparable to international peers. They have little to fear from global airlines wanting to come to India.
Besides, competition will help reduce the cost of capital for bleeding domestic carriers, allowing them to undertake
necessary investment. It will also ease the transfer of cutting- edge technology and global best practices. Improvements in
efficiency, service and quality standards will generate savings, helping increase consumer affordability.
Round Two
With changes to foreign investment rules, India’s struggling aviation industry is on the cusp of transformation. A new low-
cost domestic carrier backed by Malaysian budget airline AirAsia and the Tata Group is in the offing. Global majors Etihad
and Singapore Airlines are looking at investment options here. A price war is brewing again, although cheap tickets remain
elusive.
Which brings us back to the key question: Will our focus finally be on how many Indians are flying rather than how many
domestic airlines are flying the Indian skies?
One can only hope for the best.
About the Author:
Dr. Lalit Bhasin is the Managing Partner, Bhasin & Co., Advocates, Delhi - Mumbai, India.
He is the :
Regional President, Indo-American Chamber of Commerce- NIC
Chairman, Film Certification Appellate Tribunal
President, Society of Indian Law Firms
Vice President, The Bar Association of India
Executive President, India Law Foundation
President, Inter Pacific Bar Association
President, Indian Society for Afro Asian Studies
Honorary Life Member, International Bar Association
Chairman, CIArb (Chartered Institute of Arbitrators), India Chapter
Chairman, PHD Chamber of Commerce & Industry Committee on Corporate Affairs
Chairman, Services Export Promotion Council
Chairman, CII National Committee on Dispute Resolution
Fellow CIArb
Member, Management Committee, The Sagar School, Rajasthan
Lalit Bhasin started his law practice in 1962 and has developed Bhasin & Co. as one of the largest law
Firms in North India. His areas of specialization include Employment & Labour Laws, Corporate Law
(Formation of Joint Venture Companies, Foreign Collaborations, Amalgamations, Mergers,
Acquisitions, Disinvestment); Laws relating to Information Technology; Contract and Conveyancing;
Sports Law; Entertainment & Media Laws; Constitutional Law; Banking and Finance; Consumer
Protection Laws; Disputes relating to Foreign Investment e.g. Shareholders Agreements,
Collaboration Agreements, Agency and Distribution Agreements, Technology Transfer Agreements
and Dispute Resolution Practice.
Source: The Hindu Business Line, New Delhi, April 26, 2014