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Magazine

The great Indian aviation robbery

The pilot shortage is merely a symptom of a deeper malaise: the complete lack of competition

Anand Neelakantan

The breakdown was not sudden, though it felt that way to those of us trapped in the glass-and-steel belly of Mumbai’s Chhatrapati Shivaji Maharaj International Airport that day. It was a Tuesday that masqueraded as a descent into a Kafkaesque purgatory. I arrived for a scheduled flight to Calicut, and walked into a scene that resembled a refugee crisis hosted in a luxury shopping mall.

For seven interminable hours, the vaunted Terminal 2 ceased to be an airport and became a holding pen for the hopeless. But the most striking feature of this dystopian tableau was not the suffering of the passengers; it was the absolute, spectral absence of the airline staff. The ground personnel of the country’s largest carrier had simply vanished.

What happened that day in Mumbai, and what is happening across Indian skies, is not an accident. It is the inevitable combustion of a sector fuelled by policy hypocrisy, monopolistic arrogance, and a tax regime that seems designed to destroy the very industry it claims to nurture.

Let us dissect the anatomy of this failure. The immediate trigger was the implementation of new Flight Duty Time Limitations (FDTL). The logic is unassailable: tired pilots kill people. However, in the chaotic ecosystem of Indian aviation, logic is the first casualty. The airlines, having run their rosters on the razor’s edge of human endurance for years, threw up their hands. They did not have the pilots to support a humane roster.

And how did the government respond? Did it enforce the safety norms with an iron hand? No. It bent backward. It deferred deadlines. It allowed the chaos to fester, caught between the desire for safety and the pressure of corporate lobbying. We want First World safety records while operating with Third World resource planning. The result is a system where the pilot flying you is overworked, the roster is a fiction, and the schedule is a lie.

However, the pilot shortage is merely a symptom of a deeper malaise: the complete lack of competition. We have allowed a duopoly to calcify in our skies. With one airline controlling over 60 per cent of the market, the concept of “customer service” has become obsolete. Why should a monopoly care if you sleep on the floor of the terminal? Where else will you go? The competitors are either dead, dying, or undergoing a confused metamorphosis. In a free market, incompetence is punished by the customer. In a monopoly, incompetence is the customer’s problem.

One may argue that IndiGo is not a monopoly, and we have another major player, Air India and a few other minor players. Air India, with its perennial service troubles and ill-maintained aircraft, remains no real competitor, even after its privatisation. And when the crisis hit, it reacted by promptly jacking up the air fares to astronomical rates to squeeze the hassled passengers, along with IndiGo, who perpetuated the crisis. So much for the ‘capitalism’ that corrects itself to benefit the customers.

Yet, it would be intellectually dishonest to lay the blame entirely at the feet of the airline. They are, after all, playing a game where the house—the Government of India—has rigged the deck. This brings us to the elephant in the room, or rather, the vampire at the neck of the industry: Taxation.

On the podiums, ministers speak of UDAN (Ude Desh ka Aam Nagrik)—the dream of the common man in flight. In the backrooms of the finance ministry, however, aviation is treated with the same disdain as alcohol or tobacco. It is viewed not as a critical infrastructure backbone, but as a “sin,” a luxury indulgence of the elite that must be taxed into submission.

Consider Aviation Turbine Fuel (ATF). For any airline, fuel constitutes nearly 40 per cent of operating costs. A rational government, wishing to spur economic growth, would minimise the tax on this lifeblood of connectivity. Instead, India imposes some of the highest fuel taxes in the world. The Centre levies its excise, and then the states, acting like feudal lords guarding their borders, slap Value Added Tax (VAT) on top of it, ranging anywhere from 20 to 30 per cent.

The mathematics is brutal. An Indian airline pays nearly 60 per cent more for the same litre of fuel than its international counterparts. We are asking our carriers to run a marathon while wearing lead boots, and then we act surprised when they collapse or cut corners on service. The government’s refusal to bring ATF under the GST ambit is a testament to its addiction to easy revenue, regardless of the long-term economic damage.

To compound this fiscal predation, we have the issue of airport charges. We have privatised our airports, transforming them into gleaming cathedrals of consumption. But who pays for the glass facades and the indoor gardens? You do. The proposed hikes in User Development Fees (UDF) at major hubs like Mumbai and Delhi are nothing short of extortionate. There are proposals to increase these charges by staggering multiples in the coming years.

The airport operator views the passenger not as a traveller, but as a captive wallet. The airline is merely the shuttle bus that brings customers to their shopping mall. By allowing airport charges to balloon, the government is ensuring that flying remains a luxury, effectively killing the UDAN dream. You cannot democratise aviation by making the airport more expensive than the air ticket.

This is the great irony of the Indian model. We want the connectivity of the US, the airport aesthetics of Singapore, and the ticket prices of a bus ride, all while taxing the industry like it is a gambling den.

The chaos we witnessed was not a glitch; it was a warning. It was the sound of a system stretched to its breaking point. Wait for a national-level mobile and data breakdown. We have a duopoly there, too, like most industries and sectors. Unless the government decides to treat aviation as a utility—stripping away the punitive taxes on fuel and rationalising the exorbitant airport levies—we are heading for a crash. Not necessarily of planes, thankfully, but of the entire sector’s viability.

Until that realisation dawns on our policymakers, we, the passengers, are left with a grim reality. We are the cargo in a system designed to extract maximum value with minimum dignity. Capitalism is booming, filling the coffers of a handful. And we, the ordinary people, are the cheap commodity that is traded to fund their private jets and islands.

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