Is A380 ban in India justified?

The civil aviation authority in India has banned any scheduled inbound A380 aircraft to land in India by any foreign carriers. Emirates is probably the worst affected carrier as it was planning to operate its large A380 fleet to the Indian market. Lufthansa was also planning for the same, though in small scale compared to Emirates. At the moment, none of the Indian carriers operate A380 super jumbo. Fly Kingfisher will be the first Indian carrier to operate the super jumbo in 2016.

Is this ban justified? What competitive advantage does A380 give to foreign carriers, especially Fly Emirates? An A380 can typically carry more than 500 passengers in a 3-seat configuration. This is 20% more than the largest aircraft Indian carriers operate (B747). With higher demand to the Middle East and the European markets, the capacity of A380 can bring significant cost advantages to the carriers operating them. At the moment, foreign carriers enjoy these advantages due to the investment choices they have made in the past few years. Also, Emirates competes directly with Air India for the Middle East market. Middle East is the major international market for the ailing national carrier. With A380 used by Foreign carriers, Air India would loose further competitive edge.

Apart from US, India do not have an open skies program with any other country or region. Aviation industry in India is still highly regulated by the Indian Government. This red tape prevents foreign operates to fully tap the potential of the Indian market. It is true that Aviation is a strategic business unit for the government. However, too much of regulation could prevent the future growth of the industry. Foreign ownership rules by the Government can be justified but more reforms are needed to open up the Indian aviation market to foreign carriers. Even the developing economies unions such as ASEAN have developed a strong Open Skies policy that enables carriers within the union to operate any number of flights to any destination within the union without any regulatory pressures from the Governments. A similar deal was established between EU and US in the previous decade that opened up the competition between trans Atlantic airlines.

The aviation policies that protect the local carriers, especially Air India will only hurt the local consumers. Opening up the market increases competition; competition increases customer focus and reduces fares. Protecting Air India from competition can never be justified. Air India is non-performing state run airline. Indian taxpayers are paying for its losses in the past decade. Government should clearly identify bust organisations and should help private airlines to gear up for competition.

The aviation fuel tax paid by the Indian carriers are one of the highest in the world. This makes Indian carriers at a competitive disadvantage to start with. Instead of creating protectionist policies, the aviation ministry should enable a proper level playing field to help Indian carriers to fight for market share with foreign competitors. Until then, A380 ban is not justified.