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Posts tagged ‘Monopoly’

AIRLINES MONOPOLY


Should the government of India step in and bail out the two Airlines viz. Jet Airways and King Fisher Airlines and give them tax breaks and other benefits out of the tax payers’ money?

Both the Airlines had built up its clientèle of techies and executives who were living off the anxieties of the companies, which were pampering them with the hope that they would stick with them. Now that the party is on the wane and the writing is clearly on the wall, the clientèle has dramatically dwindled thereby bringing the squeeze.

It was not long ago, that the Low Cost Airlines (LCC) like Deccan, Go Air, Spice Jet etc had brought revolution in the skies and middle class persons were able to cut down the time of travel, to distances beyond a rail overnight journey, and get a whiff of maximizing the short leave granted to them in their work places. Our Hero who has assiduously built up an elitist image of himself and was keen on bringing in the reflection of his image to his Airlines, seduced Capt. Gopinath and thereby killed the benefits of the opening, created by the visionary zeal of Capt. Gopinath.

Today only the wealthy and the super-skilled who are sumptuously employed can afford air travel. This monopoly attempted to be established by our Hero has fallen flat.

Our hero was an NRI, as per paper reports, and had built his Brand to such dizzying heights that it may not be difficult to plough back the profits of his liquor business and off-set the PUTATIVE losses incurred by his Airlines. Yet he has the gall to ask the Govt. of India to permit him to put his hand into the national till. He had done great disservice to Indians by not only keeping his airlines elitist, but has predated with utter impunity and attempted a monopoly.

The new found friend is the largest share-holder of a company registered outside India. So therefore here we have a recipe for 2 NRIs to come together- use the cash rich companies which send their employees by an elitist airline conglomerate- and write expense accounts and show operational losses.

In the US, they have severe laws like The Sherman Act 1890, The Clayton Act 1914(?) to restrain such TYING UP agreements, so that competition is not stifled. But here in India we have MRTP Act and Competition Act etc., yet none seems to bring out the evil designs of such activities, which are done so openly. We all know that Judge Jackson had arrived at the formulation of splitting up MICROSOFT because their WEB BROWSER business was tied up inextricably with their WINDOWS 98 to the overall detriment of INNOVATION and GROWTH. Had it not been for George Bush Jr., the mammoth wud have been split up a long time back.

But here in India we do not have a conscience that works against this monopolistic forces which would bring them within the mischief of the text of the Acts passed by the legislatures.

The least that we can do, is to check up the Corporate Taxes and Direct Taxes paid out of these two Airlines and see if there have been substantial revenues generated to the country in the past years (but not thru indirect taxes), since their inception, and then take a view based on the contributions made to the national exchequer.

Losses can be generated if one is bent upon building an image without the sustaining power to maintain the image, based on performance.

It is time for Capt. Gopinath to revive the zeal and create a new low cost carrier.

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