Monday, October 3, 2011

Economic Viability of Seaplane: A Mirage


Economic Viability of Seaplane: A Mirage

By Zubair Ahmed

Seaplane was a daydream, which has already turned a nightmare. The one and only and the first in India and we conquered the sea, sky and the land with a single masterstroke. In our tourism policy, we marked it in bold that it won't be a subsidized facility. The only target we achieved before the timeframe.
But, the economics behind the whole show tells a very different story. Initially, it was the launch that went through rough weather. As this was the first time in Indian sub-continent, there were no laws and regulations on place. It was tough to get the clearances.

The Administration was 50% partner with Pawan Hans in the deal. The Swedish-made seaplane was on wet-lease from Mehair, Mumbai. Initial hiccups were taken care of by Pawan Hans. Once it landed in Port Blair in December 2010, troubles started cropping up. In January and February, it did well up to an extent. But from March onwards, with the season biding good bye, the occupancy too went literally zero.
"And out of the blue, Pawan Hans sensing the damage ahead, ditched the Administration and terminated the agreement without even informing us," said Abrahum Varickamakal, Secretary, Tourism and Civil Aviation.
With Pawan Hans pulling out of the deal, Administration was left in a lurch. Meetings beyond meetings followed. Finally, the Administration inked a new agreement directly with the company, Mehair. To increase occupancy, the rates were subsidised upto 90% at par with helicopter fares.
Today, administration pays about Rs 48 Lakhs monthly rent and Rs 40,000/- per flying hour to Mehair. This does not include other operational costs like infrastructure, controlling officers, ticketing agents and ground staff from about eight departments. "It's a complicated subject," said a senior official from tourism. Eight departments are involved in the operation of seaplane - Police, APWD, Revenue, ANIIDCO, Tourism, Civil Aviation and Forest Department. The speed boat used in transferring passengers from the pontoon to jetty costs about 10 litres of petrol every minute. All these tangible and intangible expenses are not calculated to make the seaplane successfully takeoff. "Even at 100% occupancy, with full fare, the admn would not be able to make profit out of the venture," said the official.
With crossed fingers, the department is waiting to see the result from the first upcoming full-fledge season. However, Abrahum Varickamakal seemed positive, "I will feel happy and self-assured if I could see local entrepreneurs venturing into this business after seeing this experiment a success."
However, it is learnt that many states like Goa, Tamil Nadu, Pondicherry and Kerala wants to replicate the "success" of seaplane for promoting tourism in their states. But, they too are waiting to see the bottom-line of the Island experiment before taking the plunge.

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