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DGCA plans to identify carriers in operational, financial trouble

DGCA plans to identify carriers in operational, financial trouble
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First Published: Tue, May 25 2010. 11 39 PM IST

Updated: Tue, May 25 2010. 11 39 PM IST
Mumbai: Airline regulator Directorate General of Civil Aviation (DGCA) has recommended a financial surveillance programme to identify airlines in distress, either due to financial or operational problems, to ensure that they do not compromise on safety oversight functions in an attempt to cut costs.
The programme, titled Evaluation of Air Carrier’s Management of Significant Changes, will also highlight changes in the operating conditions that might have altered the balance between financial resources and operations.
The announcement, coincidentally, comes only days after a Boeing 737 plane of state-owned Air India Express crash-landed at the Mangalore international airport, killing 158 people.
Director general of civil aviation Nasim Zaidi, in a draft circular sent to domestic airlines, has invited comments from the industry by 21 June. The programme will become effective once the final version is ready. However, DGCA has not yet set a deadline for the final draft.
Already, domestic airlines, which collectively incurred $2 billion (Rs9,480 crore) losses in fiscal 2010 due to economic slowdown and high jet fuel cost, have been under the regulator’s glare which had found many of them not following proper safety infrastructure and procedures during operations.
“...in view of adverse financial conditions of airlines, it has become necessary to take appropriate action to ensure a higher level of safety in aircraft operations,” Zaidi wrote in the memo which was reviewed by Mint.
However, Pradip Baijal, secretary general of Federation of Indian Airlines, a lobby group for domestic carriers, claimed to be unaware of the draft memo.
“I have neither heard about this draft from member airlines nor seen the DGCA draft. Member airlines may deal with DGCA individually,” he told Mint, but added that if DGCA has indeed asked for information, airlines would have to submit it.
Under the new evaluation programme, airlines will have to furnish details of all major operational changes that could potentially impact safety, such as significant layoffs, shortage of spares, and inadequate maintenance of aircraft, among others.
After it is finalized, the evaluation programme would be applicable to all scheduled passenger carriers as well as non-scheduled airlines that have more than five aircraft.
Non-scheduled carriers typically do not publish timetables, and usually ply routes not serviced by scheduled airlines such as Jet Airways (India) Ltd or Kingfisher Airlines Ltd.
“It’s a bad situation out here,” said Sanat Kaul, chairman (India chapter) of the International Foundation for Aviation and Development of the safety procedures.
“The objective of such a circular is to make sure that airlines are in better financial health so that some of the operational safety parameters are not compromised,” he said, adding that there are sufficient examples to justify such a move.
In 2008, Jet Airways fired as many as 1,900 cabin crew, but had to back down in the face of employee protests and political pressure. Oil marketing companies in May 2009 threatened Kingfisher Airlines with cash-and-carry status instead of credit lines due to late payments, but dropped the matter after the airline made a part payment.
Earlier this year, DGCA de-registered three planes of Paramount Airways Ltd following a dispute with its lessor, GE Capital Aviation Service Ltd. And India’s three largest carriers—Jet Airways, Kingfisher Airlines, and National Aviation Co. of India Ltd, which runs Air India—have on occasion delayed salaries.
Last year, DGCA had pulled up low-fare subsidiary of Jet Airways, JetLite (India) Ltd, Paramount Airways and Gurgaon-based MDLR Airlines Pvt. Ltd for not following proper safety procedures.
MDLR in October suspended its operations due to financial pressures.
The regulator had also asked Air India, Kingfisher, Go Airlines (India) Pvt. Ltd, which operates GoAir, SpiceJet Ltd and InterGlobe Aviation Pvt. Ltd, which operates IndiGo to fix procedural issues found during its inspections.
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First Published: Tue, May 25 2010. 11 39 PM IST