Aviation is an important component of the services sector. Typical elements such as simultaneous production and consumption of the service, instant delivery and involvement of the customer in the production process come into play when one thinks of services. In the context of aviation, providing a flight facility involves several services such as booking of tickets, in-flight comfort, and storage and retrieval of baggage, among others. As customer involvement is very high at almost all stages, it becomes imperative that adequate care is taken of his/her interests. In fact, organizing the entire spectrum of activities around the customers should be the norm. That, however, has not been the case with the airlines industry. Historically, airlines have had a monopolistic state-sponsored presence in their initial years, globally. The reasons are not difficult to discern -
In the Indian context, both Indian Airlines (IA)(now renamed as Indian), and Air India (AI) have had a long record of monopolizing the domestic and international airspace respectively. As part of the government initiative to pump in money and control critical sectors over several Five Year Plans, aviation was strictly a state preserve. The compelling reasons for this were-dependence on strategic infrastructure such as airports, need to spread air connectivity across the country and not limit it to select pockets, limited market size due to high cost of airfare, etc. Indian was the only choice for people wanting to fly within India, while AI was the only Indian airline operating overseas flights from within the country. In order to cover many towns and cities across the country, the government invested in several airports in different states. Considered as part of infrastructure development, the economic viability of operating skeletal services from most of these airports was ignored. Classified as a luxury travel option, air fares were naturally expected to be high and no efforts were made to pare prices by trimming operational costs. Up to the early 1990s, Indian's lording over the skies continued. The wave of liberalization and regulation unleashed competition. Players such as Damania Airways, NEPC and Modiluft entered the fray. Free from the constraints of state-sponsored Indian, these airlines preferred to operate on lucrative sectors only. This meant mostly the metros and other big cities. Although none of these players exist today, their operations exposed airline passengers to better services. Flyers of the latter were mostly dissatisfied with its poor on-time flight record, messy baggage handling, and inadequate customer service.
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