Financial Transparency Coalition

Air India A330 | allenthepostman/Flickr

Ever since the general introduction of the body scanner and enhanced pat-down in airport security lines, there’s been a furious debate in America over just how much privacy we are willing to give up for the sake of our safety in the skies.  Organizations like the American Civil Liberties Union (ACLU) argue that security should not “come at the expense of civil liberties.”  Other people just don’t feel comfortable with strangers seeing them virtually naked.  Those on the other side argue the loss of privacy is an unfortunate byproduct for the reassurance of safety.

In the last few weeks the Federal Aviation Administration (FAA) has come under fire after it was discovered that in several states and Washington, DC air traffic controllers have fallen asleep while working overnight shifts.  In response, the FAA launched an official review and Henry Krakowski, who oversaw the air traffic control system, resigned in embarrassment.

These anecdotes are emblematic of the enormous value that the United States—and indeed most of the world—has placed on security in the air.  When we hurtle through the air at 565 miles per hour in a 200 ton, six-story tall, aluminum flying-machine with 63,500 gallons of highly combustible jet fuel sitting below us, many of us feel apprehensive.  And we want some reassurance that we are safe—from both accident and malice.  As a result we debate just how much we are willing to give up for security and we quickly and harshly condemn those whose mistakes put our safety at risk.

It is against this backdrop that I have been thinking about the latest scandal to come out of India.  Late last week a government investigation uncovered widespread fraud and corruption, including pilots who falsified flying records, cheated on flight exams, and paid bribes to testing officials. As Niel Mills, chief executive of SpiceJet, has put it “You really are messing with people’s lives if you are messing with a pilot’s license. The penalties for corruption and not sticking to the rules should be much stricter and better enforced.” Two years ago the FAA threatened to downgrade the country to Category 2 status–which would restrict India’s route expansion in the United States–as a result of safety and regulatory problems.  The threat was lifted when India promised to make major changes, but in light of these new allegations the FAA may revisit demotion.

This is just the latest in a salvo of similar outrages.  Late last year India was embroiled in international gossip over the Commonwealth Games, in which Suresh Kalmadi, who was in charge of the tournament, allegedly presided over numerous corrupt deals, and several under him also contributed to the systematic graft, which resulted in the stadium delays and the use of substandard construction materials.  At the time, I argued this case showed that corruption is not only a major inhibitor of economic development and a driver of income inequality, but also can create an aura of unreliability, which can make potential investors and other countries nervous.  In other words it creates an impression of “taint.”

India’s airline industry has been booming in recent years.  Even while other Asian countries have seen a decline in airline traffic in the face of the Great Recession, India’s skies continue to flourish, with 9.6 million domestic passengers in January of this year, up almost 20% from 2010.  India has consistently ranked in the list of Top 10 countries with the highest number of additional flights each year, often falling only behind China and the United States. The boom has actually contributed significantly to the emergence of large-scale corruption as government regulation and oversight have lagged behind surging industry. E.K. Bharat Bhushan, the director general of India’s aviation industry, put it this way: “If you look at the FAA in the United States, they have five or six thousand employees. I have 140 people, with 82 airports.”

This is not good news for the Indian economy.  Aviation, like any other kind of physical infrastructure, is essential for a healthy economy.  A far-reaching network of airline routes—particularly international ones—promotes trade, business relationships, and tourism.  John Kasarda, an aviation expert at the University of North Carolina, has called airports and airlines “key infrastructure” for a country’s ability to “compete in a global economy.”

India’s scandal in the air demonstrates yet another striking example of the taint effect—and the severe consequences for the Indian economy—particularly given the sensitivity most passengers feel when boarding an airplane. Again we see the perilous consequences of corruption.  Again we see India’s widespread corruption threaten to derail its economic growth.  But when will the Indian politicians get serious about solving the problem?