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DGCA Report blunder compounds India’s airline industry problems

12-Jan-2012

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In light of the financial difficulties being experienced in the Indian aviation sector, industry regulator, the Directorate General of Civil Aviation (DGCA), recently commissioned an audit of the nation’s carriers to assess whether safety was being compromised. (A similar initiative was undertaken in 2008 at the time of the fuel price spike but nothing emerged from that.) The clumsy handling of the contents of the Dec-2011 report has only served to aggravate an already critical situation for the aviation industry.

Aviation safety-related matters are extremely sensitive, given the public concern – and the resulting commercial impact on airlines. In this case, the findings of the audit should have been handled in one of two ways: (1) If there were areas of concern requiring rectification, but not posing an immediate safety risk, the regulator should have issued private notices to each of the airlines concerned to seek clarifications and to demand a clear, time-bound plan to remedy any shortcomings, with appropriate action should the airline fail to do so; or (2) if the audit findings indicated an imminent risk to public safety the airlines concerned should have been grounded immediately.

Instead, the report was leaked to the media and a serious matter has predictably played out through sensational headlines in a manner that has created confusion and fear for the travelling public and has severely dented India’s international image. It is hard to imagine an act more designed to undermine an entire aviation industry. If passengers are dissuaded from travelling due to safety concerns, this will compound the Indian carriers’ financial challenges. Investors will be reluctant to provide funds when the Government is apparently questioning the safety of the entire system. And there is a risk that travel insurance companies will withhold insurance from travellers – something that happened in Indonesia when the European Union blacklisted that country’s system, with grave financial consequences for the industry and for tourism.

The audit report cited shortcomings at all carriers, identified areas of concern across a wide range of issues from a shortage of training captains and examiners to deficient incident reporting, poor data records, non-operational equipment, failure to conform to flight duty time limits, poor maintenance of simulators and cannibalisation of parts from grounded aircraft.

Ironically, as much as anything, this is an indictment of the regulatory oversight regime itself. Airlines must, to a large extent, be relied upon to be responsible and diligent in safety matters. But if in fact things have deteriorated to the level suggested, it is hard to imagine how this can have come as a surprise to the regulator – begging the question of why remedial action had not been taken before. Has there been any reinforcement of the regulator’s skills? Has budget been provided to ensure that oversight is improved? Apparently not. To point the finger at the airlines in this way is little more than an inexcusable dereliction of duty on the part of Government and reflects a systemic failing. The buck stops with the airlines, but for Government seemingly to wash its hands of any responsibility is inconceivable.

A shortage of skills and training, poor regulatory oversight and inadequate compliance lie at the heart of the problems highlighted. The situation is only compounded by the fact that the regulator itself is drastically under-resourced to provide the necessary safety oversight.

Despite the tone of the leaked report, the DGCA has not grounded the industry. Thus, it presumably does not perceive a clear and present danger to public safety – otherwise decisive action should have been taken to ground the airlines at risk.

Over the past two years, CAPA has consistently stated in the relevant safety forums that there is a need for a comprehensive risk assessment across the entire industry, not a piecemeal approach. This should address:

  • The oversight capability of the regulator;
  • Airspace congestion;
  • Aerodrome safety;
  • Airline systems and processes, and;
  • Training and personnel issues.

CAPA therefore supports the objectives of the audit report – indeed we would argue that it did not go far enough in terms of reviewing the entire sector. But the irresponsible manner in which the findings have been released has created an unnecessarily destabilising storm. This is highly damaging for the industry at a time when Indian aviation is entering a pivotal year. Immediate leadership is needed from the Government if a desperate situation is to be rescued from this blunder to ensure there is no compromise on delivering a strong safety regime with the active engagement of all stakeholders. And on such a critical issue there must be a common position taken by the Ministry of Civil Aviation and the DGCA, the conflicting statements on this occasion about the severity of the audit findings only served to create more confusion. An opportunity still exists to learn from this incident to strengthen the regulatory process and to introduce more regular and transparent safety surveillance across the entire aviation system, particularly at this time of financial stress.

For more in-depth analysis of the direction of Indian aviation, you may be interested in the CAPA India Aviation Outlook 2012. For a copy please download the order form attached top left or for more information contact Shuchita Gupta on sg@centreforaviation.com or +91 11 2341 4440. The form outlines special discounts for CAPA Members.


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