The Great Indian Aviation Robbery

The Hindu

I. AUTHOR’S CENTRAL ARGUMENT

The article argues that India’s civil aviation sector, despite impressive growth in passenger numbers and airline expansion, is effectively extracting value from passengers through high taxes, fees, and policy distortions, amounting to a “robbery.” The author contends that aviation in India is treated as a luxury revenue source rather than a mass transport utility, resulting in high fares, poor passenger experience, and structural inefficiencies that ultimately undermine long-term sectoral health.

II. KEY ARGUMENTS PRESENTED

1. Excessive Taxation and Charges
   – Aviation turbine fuel (ATF) is heavily taxed by states.
   – Airport charges, user development fees, and surcharges inflate ticket prices.
2. Policy-Induced Cost Burden
   – Government policies treat aviation as a premium sector rather than essential infrastructure.
   – Multiple layers of regulation and rent-seeking increase operational costs.
3. Airports as Commercial Real Estate Hubs
   – Airports prioritise retail, parking, and non-aeronautical revenues over passenger convenience.
   – The traveller becomes a captive consumer within airport ecosystems.
4. Airlines’ Thin Margins Mask Structural Failure
   – Airline losses are not primarily due to inefficiency but to systemic cost pressures.
   – Repeated airline failures point to flawed policy architecture.
5. Passenger Experience Degradation
   – Congestion, delays, high ancillary charges, and limited consumer protection dominate the flying experience.
6. Comparative Global Disadvantage
   – Indian aviation costs are uncompetitive relative to peer economies despite lower income levels.

III. AUTHOR’S STANCE AND POSSIBLE BIASES

1. Strongly Pro-Consumer Orientation
   – The article foregrounds the passenger as the principal victim of policy choices.
2. Adversarial Tone Toward the State
   – Government taxation and regulatory intent are framed as exploitative.
3. Limited Scrutiny of Airline Business Models
   – Low-cost carrier strategies and pricing practices receive less critical examination.
4. Normative Framing
   – Uses emotive language (“robbery”) to emphasise injustice, which sharpens critique but reduces analytical neutrality.

IV. PROS OF THE ARTICLE (Strengths)

1. Highlights Hidden Cost Structures
– Effectively exposes how taxes and fees silently raise fares.

2. Passenger-Centric Analysis
– Shifts focus from airlines to consumer welfare.

3. Links Policy to Market Outcomes
– Connects taxation, regulation, and infrastructure monetisation to sector stress.

4. Challenges Growth-Only Narratives
– Questions celebratory discourse around aviation expansion.

5. High UPSC Relevance
– Touches on infrastructure policy, public finance, consumer protection, and market regulation.

V. CONS OF THE ARTICLE (Critical Gaps & Limitations)

1. Underplays Fiscal Constraints of Governments
– Aviation taxation partly compensates for revenue shortfalls elsewhere.

2. Limited Discussion on Safety and Capital Costs
– High costs of safety compliance and capital investment are not fully integrated.

3. Binary Framing of Airports as Predatory
– Ignores the role of non-aeronautical revenues in cross-subsidising operations.

4. Lack of Policy Trade-Off Analysis
– Reducing taxes may lower fares but strain state finances.

5. Absence of Reform Sequencing
– Does not clearly outline which reforms should precede others.

VI. POLICY IMPLICATIONS (UPSC GS-II & GS-III RELEVANCE)

1. Infrastructure as Public Utility (GS-III)
   – Aviation policy must balance revenue generation with affordability.
2. Public Finance and Tax Rationalisation
   – ATF inclusion under GST remains a critical reform debate.
3. Regulatory Governance (GS-II)
   – Need for an independent, consumer-focused aviation regulator.
4. Urban and Transport Planning
   – Airports must integrate mobility efficiency, not just commercial viability.
5. Ease of Doing Business
   – Lower structural costs can enhance airline sustainability and connectivity.

VII. REAL-WORLD IMPACT ASSESSMENT

1. Rising Air Travel Costs
   – Disproportionately affect middle-class and first-time flyers.
2. Airline Fragility
   – Persistent losses discourage long-term investment.
3. Connectivity Inequality
   – Regional and smaller routes suffer due to high operating costs.
4. Passenger Alienation
   – Poor experience erodes trust in aviation as a reliable transport mode.
5. Global Competitiveness Risk
   – High costs may undermine India’s aspiration to be an aviation hub.

VIII. BALANCED CONCLUSION

The article delivers a forceful critique of India’s aviation policy framework, persuasively arguing that passengers bear an excessive and often invisible cost burden. It rightly challenges the notion that passenger growth alone signals sectoral success.

However, the framing occasionally oversimplifies complex fiscal and infrastructure realities. Sustainable reform will require tax rationalisation, regulatory clarity, and consumer-centric governance, while recognising governments’ revenue needs and airports’ financial viability.