India Looks to Lift Ban on Airbus A380

Wednesday, 29th January 2014 at 10:32am

With the size and diversity that India boasts it is surprising that it attracts less than 1 percent of the global tourist traffic. This has been attributed to political mishandling and the lack of willingness on the part of the government to drive growth, infrastructure that is below par for the region, lack of affordable accommodation and high visa fees. The recent international publicity following the wave of violent crime in the country has also kept tourists away from the country.

However, recent developments like the weakening currency are an encouraging sign for the tourist industry in the region. The upcoming elections in 2014 have also caused the acting government to step up its efforts to combat domestic issues and make the country a better place to live and visit.

The government is also looking to make headways on international issues with policymaking that focuses on the need to make India more competitive in the global marketplace. One of the sectors that the government is making big changes in is aviation with reform being brought about that aims to free up the market for airlines to make changes when it comes to flying in and out of India.

The industry which makes up 0.5% of the country's GDP flies 150 million passengers every year (two thirds of which are domestic passengers) which makes it the ninth largest civil aviation market in the world. This number is projected to triple up to 450 million by the end of the decade which will bring it into the top three markets in the world.

This will be the second major period of reform in the sector which has over the last decade seen the addition of many private airlines to the sector which was previously dominated by the two large state run airline, Air India and Indian Airlines. The government had allowed these airlines to set up shop on the condition that they could not operate international flight for the first five years of operation.

This lead to heavy competition between the state run airlines and the new private airlines on the domestic routes and renovations to airports across the country and international flights being offered by several private carriers. Some were overstretched and failed like Kingfisher Airlines which was a venture from the prominent liquor manufacturer.

The airlines were also hit by rising fuel prices which affected the new start ups and the full service airlines and the intense competition in an overcrowded marketplace only added to the pressures of these carriers. The number of flights could not be handled by the existing infrastructure and regular delays also proved problematic as the skies started to get very crowded by the many operating airlines and their scheduled flights.

However, there seems to be light at the end of the tunnel with major policy changes being enacted, improved infrastructure and improvement in technology that monitors the air traffic.

The government has lifted their ban on the Airbus A380 which was originally in place to protect the already struggling Air India. The A380 was designed to serve routes with high traffic in airports with fewer slots. This means that more passengers can be brought in and out of smaller airports with the capability of carrying up to 800 passengers on a single flight.

The lifting of the ban will mean that Lufthansa, Emirates, Singapore Airlines and British Airways can all now serve more passengers from their hubs to and from India. These carriers have been serving the routes to and from India for a combined fifty years and will be delighted to increase capacity on these routes.

These airlines have been using the A380 on routes to the major financial hubs in the world including New York, London, Tokyo, Singapore, Los Angeles, Johannesburg, Beijing, Frankfurt, Paris, Bangkok, Sydney and Kuala Lumpur and India has missed out of the prestige and passenger comfort and numbers that they can bring to the country. While New Delhi and Mumbai should have been in this list long ago, policies that aimed to protect Air India has caused them to miss out on the benefits of allowing these aircrafts to operate flights to and from the country.

With the Indian government allowing the aircraft to fly to four major Indian hubs- Mumbai, Delhi, Hyderabad and Bengaluru, there is a feeling that there is true liberalization coming. The carriers will next have to see how they can arrange their schedules to take advantage of these changes in rules.

AIrAsia, the largest budget carrier in Asia also plans to launch AirAsia India which will aim to serve smaller towns and cities in the country and looks to fly passengers who would otherwise be using the train for cross country transportation.

Similarly, Singapore Airlines has formed a partnership with Indian conglomerate Tata to start flights in and out of India using the Delhi Airport as a hub.

With great inroads being made into a more free market for carriers in the country, the competition should drive quality up and prices down which is good news for customers.

By: Pete Lee.