Emirates’ A380 Awaits India Approval as Rules Block Flights of Superjumbo
Emirates Airline celebrated the opening of the new terminal at the New Delhi airport last year by flying in an Airbus SAS A380.
The plane has not returned there since. India’s government has not acted on requests to change regulations that bar overseas carriers, including Emirates and Deutsche Lufthansa AG (LHA), from flying aircraft bigger than the Boeing Co. 747 into the country. That rules out the A380.
The two airlines are eager to tap India’s growing travel market with the A380, the world’s biggest passenger aircraft. They have run up against policies that protect state-owned Air India Ltd., according to Rishikesha Krishnan, a professor of corporate strategy at the Indian Institute of Management in Bangalore.
“All these measures are to shore up Air India and they completely distort the market,” said Krishnan, who writes papers about India’s aviation industry. “They are all misguided restrictive practices and not in the best interest of Indian aviation.”
The rules deny more choices for passengers and reduce competition for Air India, Krishnan said. The carrier merged with state-owned Indian Airlines in 2007 and has received 20 billion rupees ($449 million) of public funds since April 1, 2009.
Nasim Zaidi, secretary at the Ministry of Civil Aviation, declined to comment when asked if the government was delaying A380 approvals to help Air India. An Air India spokesman declined to comment, and Air India Chairman Arvind Jadhav did not respond to two calls to his mobile phone, calls to his office and e-mailed questions.
The A380 offers a “significant cost advantage to airlines, allowing them to price tickets cheaper,” said Amber Dubey, a Gurgaon, India-based director at auditing and consulting company KPMG. “That’s the reason some Indian carriers are concerned.”
Lufthansa, which flies to seven destinations in India with 52 weekly flights, is ready to operate the A380 to New Delhi as soon as India allows the service, the airline said in an e-mail response to questions.
Emirates, owner of the world’s largest fleet of A380s, anticipates strong demand for the superjumbo in the country, Tim Clark, president of the airline, said in an interview.
“We want to take the A380 to India. It would be hugely popular,” Clark said. “Our expansion plans depend on the Indian government -- they make the call on whether we can increase our frequencies.”
The A380 can seat 525 people in a typical three-class configuration, while a similar Boeing 747 can fly 416 people. The A380 has a wingspan of 262 feet (80 meters) and stands almost 80 feet tall from the ground to the top of its tail.
Airports across India, including New Delhi’s, have undergone renovation and runway extensions to accommodate the A380, said V.P. Agrawal, chairman of the state-run Airports Authority of India. Delhi’s airport added three gates -- 15, 17 and 19 -- specifically meant for the plane.
“Delhi and Hyderabad airports are built exactly to the requirement of an A380,” Agrawal told Bloomberg July 14. “A380 operations from Delhi were not permitted. I’m not sure why, but maybe others see a threat.”
Airports in Mumbai, the southern city of Chennai and Kolkata in the east can also handle the plane, Agrawal said. Kingfisher Airlines Ltd. (KAIR), the only Indian carrier to have ordered the A380, will start taking the plane in 2016, Chairman Vijay Mallya said June 6.
Allowing Emirates to fly the A380 into India would intensify competition for Air India on routes to the Gulf, which are among its most lucrative, said P.C.K. Ravindran, chairman of Kochi-based Institute of Applied Aviation Management.
“So long as Air India is a state property, the government will have to take care of its interest,” said Ravindran, who advises on air projects and has written a book about India’s regulatory framework. “Air India is not just competing with Emirates -- it is fighting for room with Etihad, Air Arabia and RAK Airways, and let’s not forget Indian carriers flying to the Gulf.”
Flights to the Gulf region, where 2.2 million Indians migrated for work between 2007 and 2009, accounted for 49 percent of Air India’s overseas services, according to the Civil Aviation Ministry’s annual report for the year ended in March.
Air India’s Troubles
Air India has about 53 weekly flights to Dubai, mostly using Airbus 321 jets that can seat 172 people. Its low-fare unit Air India Express operates 54 weekly flights, Chief Operating Officer S. Chandrakumar told Bloomberg by text message on July 12.
The company also has more immediate problems. It may receive 17 billion rupees from the government to help the carrier pay salaries and maintain services, according to a company official familiar with the matter. Air India is seeking as much as 175 billion rupees from the government to help reduce debt and pay for planes on order after posting four years of annual loss. The airline is working on a financial restructuring plan to pare debt of 400 billion rupees as of March.
As of April last year, Indian carriers were eligible to sell 711,356 seats per week on flights to and from 104 countries. They utilized only 170,914 seats a week, compared with 326,705 seats by overseas airlines, official data showed.
Air India’s struggles have come as foreign airlines nearly doubled service to and from India in 2010 compared with six years ago, according to data from the Civil Aviation Ministry. Boeing expects a market of 1,320 new passenger planes in India over the next 20 years.
To contact the reporter on this story: Karthikeyan Sundaram in New Delhi at firstname.lastname@example.org
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