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India's Aviation Industry Struggles with Restrictive Rules

Strategic Insights

— 2 min read

India's government has refused to allow international airlines such as Emirates and Deutsche Lufthansa to operate their A380 aircraft in the country, citing rules that protect state-owned Air India. This has denied passengers more choices and stifled competition for Air India, say industry experts. The rules are part of a broader effort to support Air India, which has received billions of dollars in public funds and is struggling to turn a profit.

Key Takeaways:

  • India's rules bar international airlines from flying aircraft bigger than the Boeing 747, effectively excluding the A380 from operating in the country.
  • The rules protect state-owned Air India, which has received 20 billion rupees ($449 million) in public funds since 2009 and is struggling to turn a profit.
  • Industry experts say the rules deny passengers more choices and reduce competition for Air India, which has about 53 weekly flights to Dubai using Airbus 321 jets.
  • Air India has about 53 weekly flights to Dubai, mostly using Airbus 321 jets that can seat 172 people, and operates 54 weekly flights through its low-fare unit Air India Express.
  • Kingfisher Airlines, the only Indian carrier to have ordered the A380, plans to start taking delivery of the aircraft in 2016.
  • Foreign airlines have nearly doubled their service to and from India in 2010 compared with six years ago, and Boeing expects a market of 1,320 new passenger planes in India over the next 20 years.
  • Air India's struggles have come as the airline seeks as much as 175 billion rupees from the government to help reduce debt and pay for planes on order.
  • Airports across India, including New Delhi's, have undergone renovation and runway extensions to accommodate the A380.

Statistics:

  • The A380 has a capacity of 525 people in a typical three-class configuration, compared to 416 people for the Boeing 747.
  • Airports in Mumbai, Chennai, and Kolkata can also handle the A380.
  • Flights to the Gulf region accounted for 49 per cent of Air India's overseas services, according to the Civil Aviation Ministry's annual report.
  • Air India has about 53 weekly flights to Dubai, mostly using Airbus 321 jets that can seat 172 people.
  • Kingfisher Airlines plans to take delivery of the A380 in 2016.

Sources:

  • Bloomberg - Comment from Nasim Zaidi, Secretary at the Ministry of Civil Aviation.
  • Bloomberg - Comment from VP Agrawal, Chairman of the Airports Authority of India.
  • Bloomberg - Comment from S. Chandrakumar, Chief Operating Officer of Air India Express.
  • Bloomberg - Report from the Civil Aviation Ministry's annual report for the year ended in March.
  • Bloomberg - Report from Boeing on market expectations for passenger planes in India.
  • I Media LLC 2011 - Provided by Syndigate.info an Albawaba.com company.

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