Showing posts with label Aviation. Show all posts
Showing posts with label Aviation. Show all posts
Monday, October 3, 2022
Monday, May 16, 2022
Wednesday, December 8, 2021
Wednesday, January 6, 2021
Saturday, November 14, 2020
Sunday, October 25, 2020
Thursday, June 25, 2020
Friday, May 29, 2020
STATE OF AVIATION WORLDWIDE
A very SAD day for a 100 years old industry of AVIATION.
- Virgin fires more than 3,000 people including 600 Pilots.
- Virgin Australia files for Bankruptcy.-Thai Airways files bankruptcy.
- Air Mauritius goes into Administration.- South African Airways Bankrupt.
- Finnair returns 12 planes and lays off 2,400 people.
- YOU grounds 22 planes and fires 4,100 people.
- Ryanair grounds 113 planes and gets rid of 900 pilots for the moment, 450 more in the coming months.
- Norwegian completely stops its long-haul activity!!! The 787s are returned to the lessors.
- SAS returns 14 planes and fires 520 pilots... The Scandinavian states are studying a plan to liquidate Norwegian and SAS to rebuild a new company from their ashes.
- Etihad cancels 18 orders for A350, grounds 10 A380 and 10 Boeing 787. Lays off 720 staff.
- Emirates grounds 38 A380s and cancels all orders for the Boeing 777x (150 aircraft, the largest order for this type). They "invite" all employees over 56 to retire - Wizzair returns 32 A320s and lays off 1,200 people, including 200 pilots, another wave of 430 layoffs planned in the coming months. Remaining employees will see their wages reduced by 30%.
- IAG (British Airways’ parent company) abandons the takeover of Air Europa (and will pay €40 million compensation for that).
- IAG (Iberia) grounds 56 planes.- IAG (British Airways) grounds 34 planes. Everyone over 58 to retire.
- Luxair reduces its fleet by 50% (and associated redundancies)
- CSA abolishes its long-haul sector and keeps only 5 medium-haul aircraft.- Eurowings goes into Bankruptcy- Brussels Airline reduces its fleet by 50% (and associated redundancies).- Lufthansa plans to ground 72 aircraft (in 2 instalments).
- Hop is studying the possibility of reducing fleet and staff by 50%.
Additional info:
- Currently, 60 new aircraft stored at Airbus with no buyers in sight (order cancellations) including 18 A350s.
- They *forecast a minimum of 8,000 grounded planes by September*. With an average of 5.8 crews per plane (medium and long haul combined), that would make *more than 90,000 unemployed pilots worldwide*
- The Air Transport Industry is on Life Support !*
- This will have a major impact on our lifestyle ...
Tuesday, April 14, 2020
Birdgroup Leadership Summit COVID-19 - 2020 & beyond
QUESTIONS FROM PARTICIPANTS
To: Dr Sanat Kaul :
From : Anurag Srivastava: aus@bird.in
It is requested to kindly enlighten us on future of Drones and regulations framed by Government of India.Drones can be used for various needs of society how will the regulations differing from Civil Aviation Requirement - CAR. What will be regulations for operations and maintenance of drones in and around airports/ civil/ defence enclaves. How will hardware manufacturers and software developers get together to develop products as required by civil aviation or lot many uses of drones.
To : All Panelist
From – Sarath Menon <sarath.menon@riya.travel>
As we look forward to the revival of the industry
1) What is the way forward for the tourism industry. How do you look at recovering costs in the coming months especially with this season's business on a downward spiral.
2) Are there any recourse or respite for the Travel industry especially when there are a lot of SOPs for the manufacturing and agriculture sector.
3) Can we have a relook at the sixth freedom being enjoyed by the foreign airlines. We need to restrict this so that the Indian airlines will be able to cater to such a market.
To – Mr. Lohani
From SiddharthFlamingo siddharth@flamingotravels.co.in
Can we have acrylic/glass panels to ensure adequate distance between passengers seated on an aircraft?
To – All
From – Ramesh Iyer <Ramesh.Iyer@gmrgroup.in>
• Besides, PF, can we include leave encashment, gratuity and superannuation contribution for deferment by corporates and/or contribution by government.
• Can all employees become contract employees directly with his/her employer and GST can be taken as Input Tax Credit.
• We pay GST on input materials for movable and immovable items. but cannot take input tax credit on immovable items. e.g. Passenger Terminal Building, Runways, etc. but output GST is collected and paid on all receipts.
• Wan we represent GST ITC on all items for airports sector.
• Are we incentivising those pilots, staff, etc who are providing YEOMEN Services at this crucial juncture ahead of all other citizens locally and globally, at their own life being at RISK
To- All
From – Anish Muthigi <anish@uniglobefocustravel.in>
During the call we learnt that, seats will be utilised in a way to maintain Social Distancing, basically alternate seats will be left un-utilised. However, we see that the future bookings are not in line with this view , the seat maps are clear indicators of this(e.g. SpiceJet, Air Asia etc). We are able to select adjacent seats.
In these times, any booking is a boon. We have been taking bookings for our custom, individuals, group and FIT, we have been assigning adjacent seats to families/ groups. What happens to these bookings- especially bookings of group size like 9 or 10 people?
Key Recommendations from Bird Group Leadership Initiative Webinar on “Covid – 2020 and Beyond”
Bird Group Leadership Initiative organized a webinar consisting of senior leaders from Aviation and Tourism industry on 14th April. The session was introduced by Dr Ankur Bhatia, Executive Director, Bird Group, who set the context for the discussion. He informed the attendees that this was the first in a series of planned Webinars under the Bird Group Leadership Initiaive.
The panelists included the following:-
1. Mr Ashwani Lohani (Former CMD Air India and Chairman, AP Tourism)
2. Mr Ajai Singh (CMD, Spicejet)
3. Ms Tulsi Mirchandaney (MD, Blue Dart Aviation Ltd)
4. Mr Sujit Bannerjee (Secretary General, WTTC II)
5. Dr Sanat Kaul (Chairman, International Foundation for Aviation Aerospace and Drones) –
6. Ms Jyoti Mayal (President TAAI)
Mr Rajeev Talwar, MD DLF Ltd and Former ADG Tourism moderated the session.
Mrs Radha Bhatia, Chairperson, Bird Group, summed up the discussion.
The panellists were unanimous in their assessment that aviation and tourism are amongst the hardest hit in the current crisis, and would require substantial government support to remain viable and ride out the rough patch till such time normal traffic resumes. Some key suggestions from the panellists are as under –
• Aviation, tourism and hospitality being amongst the largest employers, revival of these industries is vital to prevent large scale job losses and resulting burden on government.
• Bringing ATF under GST, reduction of excise duty on it.
• Moratorium and waiver of interest on bank loans, increase in bank limits.
• To make travelling economical and to benefit all stakeholders new method of allotment of slots / airport concessions should be worked on to remove multiple layers of cost to the traveller.
• Waiver of rentals, parking charges and similar levies by airports till revival.
• Employer portion of EPF contribution to be catered for by notional deposit by the government for next two years. This will give relief to the employers without any immediate economic impact on the government.
• Leverage, incentivize “Aas Paas Tourims” or domestic tourism till adequate confidence for international tourist arrivals is built up.
• Revise travel and hospitality protocols to cater for protection against infection and restore confidence amongst tourists.
• Utilize surplus payload of passenger aircraft due to empty seats required for social distancing by increased cargo loads in them.
• GST waivers on travel services.
• Reduction on charges for credit card / e-payment transactions.
• Industry status to Aviation, Tourism, and Hospitality sectors .
• Increase dependence on automation to reduce vulnerability due to disruptions.
• Move from profit maximisation towards sustainability.
• Inter and intra industry collaborations to return to normalcy in the shortest timeframe.
• Adequate testing protocols to enable earliest possible resumption of travel – initially domestic and subsequently international.
Sunday, September 1, 2019
Wednesday, August 14, 2019
INTEGRATING AIR SPACE TRAFFIC MANAGEMENT FOR AVIATION AND NEAR SPACE
Integrating Air and Space Traffic Management:
By Dr Sanat Kaul; Published in the Journal of Space Safety Engineering
This paper will examine and show why it is now necessary for International Civil Aviation Organisation (ICAO) to take over Air and Near Space Traffic Management as technology is similar for both. Further it becomes obligatory for ICAO to do this and Outer Space Treaty of 1957 is silent on the issue of space traffic management.
Thursday, June 20, 2019
How Indian airlines took off
2010-09-09
After getting nationalised in the fifties, private domestic airlines began re-emerging in India in the nineties. The popularity of the new private airlines went up fast as they provided better service and on-time performance with new aircraft. Then the concept of low-cost carriers (LCCs) was introduced and it found great acceptability. By the late nineties, LCCs had evolved from being marginal players in the market to occupy a dominant space, with their share of passenger traffic overtaking the full service airlines. The DGCA of India also did away with price control of tickets. A liberalised domestic market offered flexible pricing of tickets. Since airline seats became perishable like vegetables,ticket prices started varying from day to day and hour to hour. Internet sales helped.
This brought in a social revolution that was second only to the telecom one—wherein cheap cellular phones became a social and business necessity—in terms of impact. With airline tickets hitting bottom, the middle class discovered new freedoms—to travel for business and pleasure by air. The profile of air travellers was transformed. An experience largely restricted to government and corporate travellers opened out to students, housewives, self-employed small and medium entrepreneurs. New demographics were won over by LCCs’ charms.
The next advance took place at the start of this century, when private airlines were permitted to fly abroad—albeit with the unnecessary condition that it would take domestic airlines five years to qualify for foreign operations. Nonetheless, Indian airlines are now beginning to compete with the best in the world. Meanwhile, our airports were in a shabby condition and needed a lot of improvement. Kerala took the lead in 2000, coming up with a brand new airport in Cochin. Hyderabad and Bangalore followed suit. This was followed by the modernisation of Delhi and
Mumbai airports through long-term concessions.Now that we have a reasonably modern civil aviation infrastructure in place—with large domestic traffic and good international connectivity—what should be our next step? To me, the obvious answer is to create an international hub in India. What exactly is a hub? A hub is a place where a large number of airlines meet from different destinations and exchange passengers. India is well-located in Asia, connecting Europe with Far-East and Australia. Unfortunately, since we did not have good airports nor did we encourage a liberal policy towards bilateral air service agreements (except in the last few years), we missed the opportunity that Singapore and Dubai exploited to emerge as key hubs in our region (although their own domestic traffic was negligible). We need to correct this mistake. How can we develop a hub? A hub requires a good, friendly airport where waiting and flight transfers are facilitated in a comfortable fashion. It also requires the city where it is located to be service efficient and tourist friendly. Post-Commonwealth Games, it is hoped that Delhi will show these attributes. The Heathrow airport in London has come up as a major hub as it developed into a great point of interchange—with the airport providing modern facilities even as the city of London provides a good space for a break. In the East, Singapore developed as a hub after it split with Malaysia. First, it developed an airline and then a hub. Similarly, Dubai decided to first develop an airline and then an airport.
In India, with the new T3 terminal in Delhi, there is scope for developing a hub. The Delhi airport has two parallel runways that provide growth potential and it is the busiest airport in India. Unfortunately, the existing Mumbai airport cannot grow due to limitations of land, and the fate of a second airport is in a limbo, thanks to Jairam Ramesh. It is now time for the government to take a concerted decision to develop an international hub in Delhi. For this, it will have to encourage more flights into Delhi even though our own airlines may seek to guard their turf. We also need to encourage bigger aircraft like Airbus 380 to land in Delhi to create the critical mass required to create a hub and compete with the likes of Singapore and Dubai. The creation of a hub requires a good airport (which we now have) and flights coming in from all directions, with both domestic and international connectivity. The advantages of developing a hub would be many. For example, a hub provides an increase in localised tourism and overnight stays; it provides an incentive to do business in the region. However, the state government of Delhi needs to play a more proactive role in airport hub development, as it will enhance the city’s brand value rather than just sitting back and taking undeserved credit.
The author is chairman of the International Foundation for Aviation and Development (India chapter)
After getting nationalised in the fifties, private domestic airlines began re-emerging in India in the nineties. The popularity of the new private airlines went up fast as they provided better service and on-time performance with new aircraft. Then the concept of low-cost carriers (LCCs) was introduced and it found great acceptability. By the late nineties, LCCs had evolved from being marginal players in the market to occupy a dominant space, with their share of passenger traffic overtaking the full service airlines. The DGCA of India also did away with price control of tickets. A liberalised domestic market offered flexible pricing of tickets. Since airline seats became perishable like vegetables,ticket prices started varying from day to day and hour to hour. Internet sales helped.
This brought in a social revolution that was second only to the telecom one—wherein cheap cellular phones became a social and business necessity—in terms of impact. With airline tickets hitting bottom, the middle class discovered new freedoms—to travel for business and pleasure by air. The profile of air travellers was transformed. An experience largely restricted to government and corporate travellers opened out to students, housewives, self-employed small and medium entrepreneurs. New demographics were won over by LCCs’ charms.
The next advance took place at the start of this century, when private airlines were permitted to fly abroad—albeit with the unnecessary condition that it would take domestic airlines five years to qualify for foreign operations. Nonetheless, Indian airlines are now beginning to compete with the best in the world. Meanwhile, our airports were in a shabby condition and needed a lot of improvement. Kerala took the lead in 2000, coming up with a brand new airport in Cochin. Hyderabad and Bangalore followed suit. This was followed by the modernisation of Delhi and
Mumbai airports through long-term concessions.Now that we have a reasonably modern civil aviation infrastructure in place—with large domestic traffic and good international connectivity—what should be our next step? To me, the obvious answer is to create an international hub in India. What exactly is a hub? A hub is a place where a large number of airlines meet from different destinations and exchange passengers. India is well-located in Asia, connecting Europe with Far-East and Australia. Unfortunately, since we did not have good airports nor did we encourage a liberal policy towards bilateral air service agreements (except in the last few years), we missed the opportunity that Singapore and Dubai exploited to emerge as key hubs in our region (although their own domestic traffic was negligible). We need to correct this mistake. How can we develop a hub? A hub requires a good, friendly airport where waiting and flight transfers are facilitated in a comfortable fashion. It also requires the city where it is located to be service efficient and tourist friendly. Post-Commonwealth Games, it is hoped that Delhi will show these attributes. The Heathrow airport in London has come up as a major hub as it developed into a great point of interchange—with the airport providing modern facilities even as the city of London provides a good space for a break. In the East, Singapore developed as a hub after it split with Malaysia. First, it developed an airline and then a hub. Similarly, Dubai decided to first develop an airline and then an airport.
In India, with the new T3 terminal in Delhi, there is scope for developing a hub. The Delhi airport has two parallel runways that provide growth potential and it is the busiest airport in India. Unfortunately, the existing Mumbai airport cannot grow due to limitations of land, and the fate of a second airport is in a limbo, thanks to Jairam Ramesh. It is now time for the government to take a concerted decision to develop an international hub in Delhi. For this, it will have to encourage more flights into Delhi even though our own airlines may seek to guard their turf. We also need to encourage bigger aircraft like Airbus 380 to land in Delhi to create the critical mass required to create a hub and compete with the likes of Singapore and Dubai. The creation of a hub requires a good airport (which we now have) and flights coming in from all directions, with both domestic and international connectivity. The advantages of developing a hub would be many. For example, a hub provides an increase in localised tourism and overnight stays; it provides an incentive to do business in the region. However, the state government of Delhi needs to play a more proactive role in airport hub development, as it will enhance the city’s brand value rather than just sitting back and taking undeserved credit.
The author is chairman of the International Foundation for Aviation and Development (India chapter)
Future of aviation industry in India
It has been adequately proved by economists that aviation is a catalyst to growth, but the price must be right. For example, tourism (both domestic and international) can be a major provider of economic prosperity as well as employment. But unless tourism ministry plans out its tourism circuits and arranges to have air connectivity at a competitive price to its competitors, the growth will be poor. Indians find it cheaper to holiday in Thailand than India, in spite of the fact that Thai Bhat has gone up in value.
Role in connectivity Similarly, the industry requires good connectivity, and that is why Indian industry tends to concentrate on few urban areas. The five industrial corridors being planned will need airports to connect, as otherwise, no big industrialist would go there. As the middle class grows, time takes precedence over price and faster connectivity provides better results. Similarly, medical tourism should be based on connectivity so that our quality hospitals get patients from all over the world. So far airports have agreed to have hotels in their compound but not hospitals. Why not? NCAP is commendable
The Ministry of Civil Aviation has come out finally with a new National Civil Aviation Policy (NCAP), which is fairly comprehensive and need to be complimented for it. While one can pick many holes in it, the fact that it has come out with a final policy after a 10-year wait is something to be said. The policy has stated up front that India has the potential to be the top three in terms of domestic and international passenger traffic. While this is certainly possible, it is necessary to have the right policy with the flexibility to tweak it when necessary.
This policy document deals both with international potential as well as regional connectivity. Here, it may be stated that unlike roads or railways where public funds come from budgetary sources, aviation development is largely from its own sources. Except for Air India, where budgetary resources have been invested after 84 years of its existence for its revival, both airlines and airports have come up on their own funds.
Role of various charges levied
While airlines finance themselves privately, Airports Authority of India has a non-lapsable fund from its income out of navigation charges and earnings from a dozen profit making airports. Here lies the rub. For airlines to be financially viable, airport charges and government taxes and fees need to be reasonable. Is this the situation in India?
The taxes and fees including service tax, airport development fee, among others, are very high and form more than half the price of the ticket. Airport charges at metro airports are also high. On top of that Directorate General of Civil Aviation (DGCA) has put, rightly, many consumer-friendly conditions on the airlines which makes cost of airline running very high. These conditions are not on other forms of transport like the railways and road transport, who are relatively less taxed.
There is a need to wean away passengers from railways and allow airline to take the load as railways tend to subsidise passengers from its freight earnings, which is neither good for the railways nor industry. Railways share in freight in India has already decreased from 53% in 1986-87 to less than 30% today. Air India is now wooing the Rajdhani AC II tier passenger on key metro routes by offering them unsold airline seats four hours before departure on line. This integration of railways with airline is a great move by Air India in the right direction and hopefully other airlines will follow. Bullet train — a failure
However, the current policy of the government in introducing a ‘trophy’ project like the ‘bullet train’ is totally unnecessary. Instead of spending Rs 1 lakh crore with concomitant land acquisition issues, it would be prudent and much cheaper instead to buy a few A380 aircraft with 555 seats and put them on a shuttle service between the two terminal points of the proposed bullet train at, perhaps, even with a little subsidy. As a matter of fact, tickets for a bullet train are much higher than ordinary railway tickets. In order to build up an aviation infrastructure of airports the first step was taken in 1994 after abolition of Air Corporation Act of 1953, when monopoly of erstwhile Indian Airline was taken away. The DGCA then issued Route Dispersal Guidelines to all commercial airlines to cross subsidise unpopular routes of North-East, J&K and island territories. In the present policy, another subsidised scheme for regional connectivity called Regional Connectivity Scheme(RCS) has been introduced. This scheme is based on funding from passenger tickets/concession by state governments and by airports. While this scheme is conceptually good, it appears very complicated and difficult to implement. If successful, it will be a great scheme for connecting another 50 odd regional locations in India from exiting functional airports. Lack of manufacturing
The thing to worry is the lack of aviation-based manufacturing in India. The Indian automobile industry as well as the space industry have done very well but aviation-based manufacturing has lagged behind. India desperately needs to build up its aviation manufacturing base. However, with the current government polices even MRO (Maintenance Repair and Overhaul) services have not been successful and our airlines send their aircraft abroad for servicing.
Lastly, but not the least, the new policy of permitting 100% equity of foreign airline in a domestic airline needs a relook. Besides security aspects, this will destroy the local airline industry and the very basis of nationally-owned airlines. India has done it unilaterally, but it will never be on a reciprocal basis, as no major aviation power will allow its airline industry to be destroyed. (The author is Chairman of International Foundation for Aviation, Aerospace and Development-India Chapter)
Flying at the right price
2010-12-21
As tariffs on most domestic routes climbed up, the Union civil aviation ministry and the sector regulator sprang into action to give private airlines a rap on the knuckles for jacking up tariffs. Was this a legitimate government intervention? We examine the issue, as always, in a simple Q&A format
How do airline fares get determined? It must be stated at the outset that pricing of airline tickets is not within the purview of India’s aviation industry regulator, the Directorate General of Civil Aviation (DGCA). And airlines are free to fix the price of their tickets. This is subject to DGCA’s Route Dispersal Guidelines, which require airlines to fly 10% of their trunk routes in remote areas like J&K, the North-East, Andaman, and Lakshwadeep Islands. Within this framework, airlines determine their own fares. However, under Aircraft Rule 135, framed under the Aircraft Act of 1934, the DGCA has the obligation of oversight of ticket prices. I quote the relevant sub-sections of this rule: Subsection 4: Where the Director-General is satisfied that any air transport undertaking has established excessive or predatory tariff under sub-rule (1) or has indulged in oligopolistic practice, he may, by Order, issue directions to such air transport undertaking. Subsection 5: Every direction issued under sub-rule (4) shall be complied with by such air transport undertaking.
Airline pricing is an intricate exercise in marketing. The ticket price does not necessarily have anything to do with distance travelled. A long-distance ticket can be cheaper than a short-distance one. Three persons sitting in a row could easily be paying three different prices for the same journey. Date of purchase will also vary the ticket price. The day of travel, say weekend vs week day, will vary and impact price. The ticket price is a marketing exercise based on demand and supply. In addition, it also takes into account how to attract customers from other airlines and to create customer loyalty. It is based on complicated computer programmes, taking into account various factors like the ones mentioned above, to maximise profit and create customer loyalty.
However, in developing a perfect airline price search engine, there have been many problems and little success. The problem gets even more complicated in real life when thousands of fares may play out in a journey involving changes and halts. Are there trend issues involved? If there is indeed a predictable seasonality, did the Indian government get involved at a misleading juncture, in so far as fares will start going up again around Christmas?
Yes, trend issues are involved as different seasons have distinct demands. Christmas-New Year is one such season; school holidays bring their own demand. During the ‘high season’, one can expect an increase in price due to demand and supply playing out in a free market environment. But the recent surge in prices was not really based on any established trend. The growth in the economy led to an increase in demand.
Is there an airline cartel operating in India?
Cartelisation is never done openly and announced. But cartelisation in the airline sector is a known phenomenon. Due to strong anti-trust legislation and compliance pursued in western countries, there have been many proven cases of cartelisation by airlines. What constitutes cartelisation? Cartelisation can be defined as an ‘abuse of dominance’ when dominance can be considered at 50% market share. How does one define ‘abuse’? Abuse of dominance will involve collusive action by airlines, to jack up prices from their position of dominance. Is the present case of high ticket prices one of cartelisation and abuse of dominance or is it a simple case of changing demand and supply? As per a recent newspaper report, the ratio of the number of ticket sales to the number of seats available per day does show that the sudden hike in prices may not have been a simple case of demand and supply. There is evidence that ticket prices shot up very high for flights that actually carried a significant number of vacant seats. If this is correct, it suggests the creation of an artificial shortage in the face of rising demand. A working analogy would be to wholesalers hoarding potatoes to jack up prices and make windfall profits. But before we come to this conclusion, we need to properly check up on the statistics. This can be best done by the Competition Commission of India. Can a cartel exist in a sector that has the participation of a government player? Air India, in this instance.
Certainly. Public sector monopolies have often abused their monopoly or dominant position. In the airline sector, Indian Airlines was a monopoly to begin with and then went on to become the price leader in the nineties. At that time, ticket prices did go up due to monopolistic or oligopolistic conditions. While government approval was taken in advance, high overheads and allowances ensured that the airline needed to charge higher ticket prices to make a profit or even break even at times. Any way, even in the nineties, the dominant player and market leader would set the trend and others would follow. It was only after the advent of low-cost carriers that free market-determined pricing based on demand and supply became operational in the Indian skies.
Was civil aviation minister Praful Patel being fair in asking for a reduction in private airlines’ fares? On the other hand, can private airlines cry foul when they keep going to the government for one kind of bailout or another?
As already stated, Aircraft Rules of 1937 do put the responsibility on DGCA to ensure that there is no predatory or excessive pricing of tickets. The regulator also has to ensure that there are no oligopolistic tendencies in civil aviation. All this has to be to the subjective satisfaction of the DGCA. The Aircraft Rules have thrust this responsibility on the DGCA. It is, therefore, for the DGCA to determine whether the sudden jump in prices was a simple case of demand and supply or a case of oligopolistic developments by which airlines were creating an artificial shortage and making prices jump to make windfall gains. It may also be pointed out that private low-cost carriers have set the trend that keeps down prices and have been instrumental in the lowering of ticket prices in general. In the present case, it has been noticed that not only were the ticket prices of low-cost carriers as high as those of full service carriers, they were actually higher in some cases. This new tendency gives an indication that there might have been an oligopolistic trend in the market. Airlines seeking bailouts and fiscal concessions from the government is a separate issue and has no connection with this matter.
Is it the DGCA’s responsibility to keep a watchful eye on the pricing of airline tickets in spite of the sector having been deregulated?
Yes, it is. The DGCA of India is required to maintain a surveillance over prices to ensure that there is no predatory pricing, no excessive pricing or formation of cartels. The Competition Commission is the right forum in case cartelisation is taking place and collusive pricing of tickets is being done. In case DGCA finds prima facie collusion between airlines, it should recommend the case to the Competition Commission of India for investigation and disposal.
The author is chairman, International Foundation for Aviation, Aerospace and Development (India Chapter)
As tariffs on most domestic routes climbed up, the Union civil aviation ministry and the sector regulator sprang into action to give private airlines a rap on the knuckles for jacking up tariffs. Was this a legitimate government intervention? We examine the issue, as always, in a simple Q&A format
How do airline fares get determined? It must be stated at the outset that pricing of airline tickets is not within the purview of India’s aviation industry regulator, the Directorate General of Civil Aviation (DGCA). And airlines are free to fix the price of their tickets. This is subject to DGCA’s Route Dispersal Guidelines, which require airlines to fly 10% of their trunk routes in remote areas like J&K, the North-East, Andaman, and Lakshwadeep Islands. Within this framework, airlines determine their own fares. However, under Aircraft Rule 135, framed under the Aircraft Act of 1934, the DGCA has the obligation of oversight of ticket prices. I quote the relevant sub-sections of this rule: Subsection 4: Where the Director-General is satisfied that any air transport undertaking has established excessive or predatory tariff under sub-rule (1) or has indulged in oligopolistic practice, he may, by Order, issue directions to such air transport undertaking. Subsection 5: Every direction issued under sub-rule (4) shall be complied with by such air transport undertaking.
Airline pricing is an intricate exercise in marketing. The ticket price does not necessarily have anything to do with distance travelled. A long-distance ticket can be cheaper than a short-distance one. Three persons sitting in a row could easily be paying three different prices for the same journey. Date of purchase will also vary the ticket price. The day of travel, say weekend vs week day, will vary and impact price. The ticket price is a marketing exercise based on demand and supply. In addition, it also takes into account how to attract customers from other airlines and to create customer loyalty. It is based on complicated computer programmes, taking into account various factors like the ones mentioned above, to maximise profit and create customer loyalty.
However, in developing a perfect airline price search engine, there have been many problems and little success. The problem gets even more complicated in real life when thousands of fares may play out in a journey involving changes and halts. Are there trend issues involved? If there is indeed a predictable seasonality, did the Indian government get involved at a misleading juncture, in so far as fares will start going up again around Christmas?
Yes, trend issues are involved as different seasons have distinct demands. Christmas-New Year is one such season; school holidays bring their own demand. During the ‘high season’, one can expect an increase in price due to demand and supply playing out in a free market environment. But the recent surge in prices was not really based on any established trend. The growth in the economy led to an increase in demand.
Is there an airline cartel operating in India?
Cartelisation is never done openly and announced. But cartelisation in the airline sector is a known phenomenon. Due to strong anti-trust legislation and compliance pursued in western countries, there have been many proven cases of cartelisation by airlines. What constitutes cartelisation? Cartelisation can be defined as an ‘abuse of dominance’ when dominance can be considered at 50% market share. How does one define ‘abuse’? Abuse of dominance will involve collusive action by airlines, to jack up prices from their position of dominance. Is the present case of high ticket prices one of cartelisation and abuse of dominance or is it a simple case of changing demand and supply? As per a recent newspaper report, the ratio of the number of ticket sales to the number of seats available per day does show that the sudden hike in prices may not have been a simple case of demand and supply. There is evidence that ticket prices shot up very high for flights that actually carried a significant number of vacant seats. If this is correct, it suggests the creation of an artificial shortage in the face of rising demand. A working analogy would be to wholesalers hoarding potatoes to jack up prices and make windfall profits. But before we come to this conclusion, we need to properly check up on the statistics. This can be best done by the Competition Commission of India. Can a cartel exist in a sector that has the participation of a government player? Air India, in this instance.
Certainly. Public sector monopolies have often abused their monopoly or dominant position. In the airline sector, Indian Airlines was a monopoly to begin with and then went on to become the price leader in the nineties. At that time, ticket prices did go up due to monopolistic or oligopolistic conditions. While government approval was taken in advance, high overheads and allowances ensured that the airline needed to charge higher ticket prices to make a profit or even break even at times. Any way, even in the nineties, the dominant player and market leader would set the trend and others would follow. It was only after the advent of low-cost carriers that free market-determined pricing based on demand and supply became operational in the Indian skies.
Was civil aviation minister Praful Patel being fair in asking for a reduction in private airlines’ fares? On the other hand, can private airlines cry foul when they keep going to the government for one kind of bailout or another?
As already stated, Aircraft Rules of 1937 do put the responsibility on DGCA to ensure that there is no predatory or excessive pricing of tickets. The regulator also has to ensure that there are no oligopolistic tendencies in civil aviation. All this has to be to the subjective satisfaction of the DGCA. The Aircraft Rules have thrust this responsibility on the DGCA. It is, therefore, for the DGCA to determine whether the sudden jump in prices was a simple case of demand and supply or a case of oligopolistic developments by which airlines were creating an artificial shortage and making prices jump to make windfall gains. It may also be pointed out that private low-cost carriers have set the trend that keeps down prices and have been instrumental in the lowering of ticket prices in general. In the present case, it has been noticed that not only were the ticket prices of low-cost carriers as high as those of full service carriers, they were actually higher in some cases. This new tendency gives an indication that there might have been an oligopolistic trend in the market. Airlines seeking bailouts and fiscal concessions from the government is a separate issue and has no connection with this matter.
Is it the DGCA’s responsibility to keep a watchful eye on the pricing of airline tickets in spite of the sector having been deregulated?
Yes, it is. The DGCA of India is required to maintain a surveillance over prices to ensure that there is no predatory pricing, no excessive pricing or formation of cartels. The Competition Commission is the right forum in case cartelisation is taking place and collusive pricing of tickets is being done. In case DGCA finds prima facie collusion between airlines, it should recommend the case to the Competition Commission of India for investigation and disposal.
The author is chairman, International Foundation for Aviation, Aerospace and Development (India Chapter)
A nosediving secto
2012-05-08
The minister of civil aviation, Mr. Ajit Singh, informed the Rajya Sabha on May 3, 2012, that total operation losses for all airlines for the years 2008-09, 2009-10 and 2010-11 are R19,000 crore and a R10,000 crore loss is anticipated in 2011-12. Except for Indigo, all airlines are in the red.
The abortive divestment of Air India took place in the year 2001 when the airline had been practically divested to a joint venture between Tata and Singapore Airlines, but for a last minute hitch. This was followed immediately by the catastrophic incident of 9/11 at the World Trade Centre, New York, which put the aviation industry in India and worldwide into a down-swing situation and the Air India divestment could not take place. Had the divestment taken place, Air India would have been once again a leading carrier.
By 2004, after the UPA government took over, a decision was taken, without any stated reasons, not to divest Air India. At the same time, a large number of aircraft were ordered, numbering 111, together for Air India and Indian Airlines, the two public sector airlines. From all accounts, the number of aircraft ordered was more than the initial demand of the airlines and the orders were hiked up by persuading the management to increase the number, and a government guarantee was provided against the loan taken by the airlines, a case normally not done. As a result, any default by the two public sector airlines would be a direct government liability.
Three major mistakes were made during the period 2004 onwards. Kingfisher Airlines, which started operations in the year 2005, maintained a very high profile but never showed profits. The purchase of Air Deccan by Kingfisher in 2007, of Air Sahara by Jet in 2007 and finally the merger of Air India with Indian Airlines, announced also in 2007, all turned sour. All these three decisions have not brought the financial benefits expected. However, the major loss to this sector has been suffered by Air India (R17,800 crore), followed by Kingfisher Airlines (R7,000 crore). Another factor that has led to the current state is the rise of low-cost carriers (LCCs), which started in 2003 and, by their popularity, turned the airline industry upside down. LCCs now have a market share of over 70% and, therefore, full service airlines have suffered in comparison and started their own LCC subsidiaries, except for Kingfisher that decided to close down Kingfisher Red, its LCC subsidiary.
What should be the role of the government in this scenario? In a free-market economy that India has adopted (unlike China, where their airlines are showing good profits), airlines suffering losses have to either go into bankruptcy or merge into other airlines. This happens in the US and other western economies, too. This also happened in the Indian context, when airline companies such as East-West Airlines, ModiLuft and Damania Airways went under and were merged into other airlines through market processes. Are the market forces the best determination of prices, especially in the transport sector? Is ruthless competition the best answer when ticket prices swing from very low to very high? Why is it that Indian Railways follows a strict ticket pricing policy with no variation in high seasons? Is aviation still considered a rich man’s mode of travel and, therefore, prices don’t matter? Why has AirAsia, the leading LCC of East Asia, withdrawn from India? Why is there this new service tax on air tickets when it is not applicable on rail tickets? Why is the ministry of civil aviation a hapless onlooker to what is happening to their area of interest? Why is the Civil Aviation Policy still a draft after last 10 years? These remain unanswered questions.
However, having adopted the Western-style model, we did not allow either Air India or Kingfisher Airlines to go down. While the Prime Minister announced from Delhi’s Red Fort on the occasion of Independence Day 2009, that Air India will not be allowed to go under, Kingfisher Airlines was saved by public sector banks which converted its debt into equity at a very high rate and now own 23% of it, plus more debt.
There are two separate issues that are bringing down the aviation sector in India. First, it’s the government—both states and Centre. Over-taxation of this sector is, in fact, killing it. Taxes on a ticket reveal only a partial picture. The current budget has again imposed yet another hike in sales tax. The air turbine fuel (ATF) is another racket. The Rakesh Mohan Committee Report of the Working Group on Civil Aviation (January 2012) states: “As a result of all these factors and other tax-related issues, ATF prices in India are unduly higher than international benchmarks, resulting in a tremendous financial burden on Indian carriers. ATF prices in India are nearly 60% costlier than competing hubs like Dubai, Singapore and Kuala Lumpur.” It further states that “ATF is subject to a multitude of cascading taxes by different government entities”.
The government apathy in this context is baffling to say the least and can be termed as irresponsible. The second contention is that the airline pricing system is also killing the industry. The exit of AirAsia—a fast-growing LCC in East Asia—from India is on the grounds that it will not fly to a destination below costs. As taxes and levies go up, including airport charges, other foreign airlines may also abandon India.
While low-cost airline ticket prices are consumer friendly, the sudden and seasonal increase requires a sense of sanity for the industry. The concept of ‘excessive’ and ‘predatory’ prices finds a mention in the Aircraft Act of DGCA. However, as an umpire, DGCA is yet to determine what is meant by ‘excessive’ and ‘predatory’ and start implementing it as part of its mandatory duty.
Last but not the least, joining the airline group are the two major airports of Delhi and Mumbai, both improved under public private partnership and both turning sick.
The author is chairman of International Foundation of Aviation, Aerospace and Development (India chapter)
The minister of civil aviation, Mr. Ajit Singh, informed the Rajya Sabha on May 3, 2012, that total operation losses for all airlines for the years 2008-09, 2009-10 and 2010-11 are R19,000 crore and a R10,000 crore loss is anticipated in 2011-12. Except for Indigo, all airlines are in the red.
The abortive divestment of Air India took place in the year 2001 when the airline had been practically divested to a joint venture between Tata and Singapore Airlines, but for a last minute hitch. This was followed immediately by the catastrophic incident of 9/11 at the World Trade Centre, New York, which put the aviation industry in India and worldwide into a down-swing situation and the Air India divestment could not take place. Had the divestment taken place, Air India would have been once again a leading carrier.
By 2004, after the UPA government took over, a decision was taken, without any stated reasons, not to divest Air India. At the same time, a large number of aircraft were ordered, numbering 111, together for Air India and Indian Airlines, the two public sector airlines. From all accounts, the number of aircraft ordered was more than the initial demand of the airlines and the orders were hiked up by persuading the management to increase the number, and a government guarantee was provided against the loan taken by the airlines, a case normally not done. As a result, any default by the two public sector airlines would be a direct government liability.
Three major mistakes were made during the period 2004 onwards. Kingfisher Airlines, which started operations in the year 2005, maintained a very high profile but never showed profits. The purchase of Air Deccan by Kingfisher in 2007, of Air Sahara by Jet in 2007 and finally the merger of Air India with Indian Airlines, announced also in 2007, all turned sour. All these three decisions have not brought the financial benefits expected. However, the major loss to this sector has been suffered by Air India (R17,800 crore), followed by Kingfisher Airlines (R7,000 crore). Another factor that has led to the current state is the rise of low-cost carriers (LCCs), which started in 2003 and, by their popularity, turned the airline industry upside down. LCCs now have a market share of over 70% and, therefore, full service airlines have suffered in comparison and started their own LCC subsidiaries, except for Kingfisher that decided to close down Kingfisher Red, its LCC subsidiary.
What should be the role of the government in this scenario? In a free-market economy that India has adopted (unlike China, where their airlines are showing good profits), airlines suffering losses have to either go into bankruptcy or merge into other airlines. This happens in the US and other western economies, too. This also happened in the Indian context, when airline companies such as East-West Airlines, ModiLuft and Damania Airways went under and were merged into other airlines through market processes. Are the market forces the best determination of prices, especially in the transport sector? Is ruthless competition the best answer when ticket prices swing from very low to very high? Why is it that Indian Railways follows a strict ticket pricing policy with no variation in high seasons? Is aviation still considered a rich man’s mode of travel and, therefore, prices don’t matter? Why has AirAsia, the leading LCC of East Asia, withdrawn from India? Why is there this new service tax on air tickets when it is not applicable on rail tickets? Why is the ministry of civil aviation a hapless onlooker to what is happening to their area of interest? Why is the Civil Aviation Policy still a draft after last 10 years? These remain unanswered questions.
However, having adopted the Western-style model, we did not allow either Air India or Kingfisher Airlines to go down. While the Prime Minister announced from Delhi’s Red Fort on the occasion of Independence Day 2009, that Air India will not be allowed to go under, Kingfisher Airlines was saved by public sector banks which converted its debt into equity at a very high rate and now own 23% of it, plus more debt.
There are two separate issues that are bringing down the aviation sector in India. First, it’s the government—both states and Centre. Over-taxation of this sector is, in fact, killing it. Taxes on a ticket reveal only a partial picture. The current budget has again imposed yet another hike in sales tax. The air turbine fuel (ATF) is another racket. The Rakesh Mohan Committee Report of the Working Group on Civil Aviation (January 2012) states: “As a result of all these factors and other tax-related issues, ATF prices in India are unduly higher than international benchmarks, resulting in a tremendous financial burden on Indian carriers. ATF prices in India are nearly 60% costlier than competing hubs like Dubai, Singapore and Kuala Lumpur.” It further states that “ATF is subject to a multitude of cascading taxes by different government entities”.
The government apathy in this context is baffling to say the least and can be termed as irresponsible. The second contention is that the airline pricing system is also killing the industry. The exit of AirAsia—a fast-growing LCC in East Asia—from India is on the grounds that it will not fly to a destination below costs. As taxes and levies go up, including airport charges, other foreign airlines may also abandon India.
While low-cost airline ticket prices are consumer friendly, the sudden and seasonal increase requires a sense of sanity for the industry. The concept of ‘excessive’ and ‘predatory’ prices finds a mention in the Aircraft Act of DGCA. However, as an umpire, DGCA is yet to determine what is meant by ‘excessive’ and ‘predatory’ and start implementing it as part of its mandatory duty.
Last but not the least, joining the airline group are the two major airports of Delhi and Mumbai, both improved under public private partnership and both turning sick.
The author is chairman of International Foundation of Aviation, Aerospace and Development (India chapter)
What’s in the air
May 21, 2010 Published in-------
The airline industry is no longer a non-priority industry. Its importance in transportation is being felt more and more as India achieves increasing economic progress. The need for good and stable air connectivity for business travel (including tourism, which is the world’s biggest business) and cargo (by value) is being felt the world over.
However, unlike the other modes of transport, the airline industry has been totally deregulated—leading to some tendencies that are a little unsettling.
Unlike the railways, which is still fully owned by the government and monopolistic in nature, the airline industry was opened up in 1990. Here, neither the entry of new players nor fleet expansion by existing players is a major issue. The aviation ministry, perhaps, still maintains a committee to regulate purchase of aircraft by airlines but it has a liberal approach in this process.
The issue that comes up now is whether there is a need to have a regulator for airlines, so that the ups and downs of the industry can be regulated. The free pricing of tickets has been a major boon for passengers who plan ahead. The low-cost carrier model of the industry has also led to great advantages for passengers. Hence a boom in travel for the unfortunately termed ‘cattle class’ passengers. But the flip side of all these developments is also something to be considered.
The first issue is whether we should allow the expansion of our domestic fleets as well as international flights without a full physical backup of ground facilities like airport landing and parking slots or even terminal buildings. The aviation growth in India has been haphazard, to say the least. The mismatch between ground and traffic facilities and the growth of aircraft in the Indian skies has created distorted economies and wasteful expenditure—including unnecessary fuel burn and emissions, both at the ground level and in the sky.
It is also unfortunate that there has been no scientific analysis of the growth of air traffic at various levels of GDP and free float ticket prices, even as fleets have expanded in the country. Such studies can reveal that under the existing band of fuel and other charges, what would be the likely passenger offload by airlines. In fact, a scenario can be built to show how aviation can boom alongside lowering of tariffs. They can also give us some idea about the demand from smaller towns for regional air services and their affordability. They can also help in managing the sales tax rates that are impacting the airline industry. There are, of course, instances in which the benefits of lowered sales taxes have translated into increased sales to consumers, as well as increased tax revenue collections.
The Naresh Chandra report, A Road Map for Civil Aviation Sector, of November 2003 suggested the creation of an Essential Air Services Fund (EASF). Such a fund would help meet the objective of preserving essential but uneconomic services. This brings up the discussion of what can be termed as an ‘essential air service’. It may be pointed out that in the days of the erstwhile Indian Airlines, there used to be greater air connectivity in India than there is today. Unfortunately, profitability of routes has now taken precedence over the ‘essential’ requirement and this needs correction. Indian Airlines cross-subsidised routes in old days. This was replaced by Route Dispersal Guidelines after liberalisation, but the impact of these guidelines has been limited.
EASF, if well endowed, can be a better replacement for the existing Route Dispersal Guidelines. It could work on similar principles as the Universal Service Obligation Fund of the telecom ministry, which has the objective of extending telecom services to rural areas. The Naresh Chandra report has also suggested that a fund of this sort should be outside the Consolidated Fund of India, with the government replacing taxes and fees such as IATT, FTT and PST with a single ad valorem sector-specific fee. Such subsidy schemes in different forms work in Australia, the US and Canada—all of them large countries with remote unviable locations.
In conclusion, there is a need for greater monitoring of an increasingly competitive airline business domestically, which is seeing an indiscriminate introduction of aircraft while fleet utilisation remains poor and predatory pricing continues.
Simultaneously, there is the need for extending air services to smaller towns to provide them with essential air connectivity until such routes becomes viable. A complete study on this subject is called for, which might lead to the creation of another regulator for the airline sector.
The author is chairman of the International Foundation of Aviation, Aerospace and Development
sanat_kaul@hotmail.com
The airline industry is no longer a non-priority industry. Its importance in transportation is being felt more and more as India achieves increasing economic progress. The need for good and stable air connectivity for business travel (including tourism, which is the world’s biggest business) and cargo (by value) is being felt the world over.
However, unlike the other modes of transport, the airline industry has been totally deregulated—leading to some tendencies that are a little unsettling.
Unlike the railways, which is still fully owned by the government and monopolistic in nature, the airline industry was opened up in 1990. Here, neither the entry of new players nor fleet expansion by existing players is a major issue. The aviation ministry, perhaps, still maintains a committee to regulate purchase of aircraft by airlines but it has a liberal approach in this process.
The issue that comes up now is whether there is a need to have a regulator for airlines, so that the ups and downs of the industry can be regulated. The free pricing of tickets has been a major boon for passengers who plan ahead. The low-cost carrier model of the industry has also led to great advantages for passengers. Hence a boom in travel for the unfortunately termed ‘cattle class’ passengers. But the flip side of all these developments is also something to be considered.
The first issue is whether we should allow the expansion of our domestic fleets as well as international flights without a full physical backup of ground facilities like airport landing and parking slots or even terminal buildings. The aviation growth in India has been haphazard, to say the least. The mismatch between ground and traffic facilities and the growth of aircraft in the Indian skies has created distorted economies and wasteful expenditure—including unnecessary fuel burn and emissions, both at the ground level and in the sky.
It is also unfortunate that there has been no scientific analysis of the growth of air traffic at various levels of GDP and free float ticket prices, even as fleets have expanded in the country. Such studies can reveal that under the existing band of fuel and other charges, what would be the likely passenger offload by airlines. In fact, a scenario can be built to show how aviation can boom alongside lowering of tariffs. They can also give us some idea about the demand from smaller towns for regional air services and their affordability. They can also help in managing the sales tax rates that are impacting the airline industry. There are, of course, instances in which the benefits of lowered sales taxes have translated into increased sales to consumers, as well as increased tax revenue collections.
The Naresh Chandra report, A Road Map for Civil Aviation Sector, of November 2003 suggested the creation of an Essential Air Services Fund (EASF). Such a fund would help meet the objective of preserving essential but uneconomic services. This brings up the discussion of what can be termed as an ‘essential air service’. It may be pointed out that in the days of the erstwhile Indian Airlines, there used to be greater air connectivity in India than there is today. Unfortunately, profitability of routes has now taken precedence over the ‘essential’ requirement and this needs correction. Indian Airlines cross-subsidised routes in old days. This was replaced by Route Dispersal Guidelines after liberalisation, but the impact of these guidelines has been limited.
EASF, if well endowed, can be a better replacement for the existing Route Dispersal Guidelines. It could work on similar principles as the Universal Service Obligation Fund of the telecom ministry, which has the objective of extending telecom services to rural areas. The Naresh Chandra report has also suggested that a fund of this sort should be outside the Consolidated Fund of India, with the government replacing taxes and fees such as IATT, FTT and PST with a single ad valorem sector-specific fee. Such subsidy schemes in different forms work in Australia, the US and Canada—all of them large countries with remote unviable locations.
In conclusion, there is a need for greater monitoring of an increasingly competitive airline business domestically, which is seeing an indiscriminate introduction of aircraft while fleet utilisation remains poor and predatory pricing continues.
Simultaneously, there is the need for extending air services to smaller towns to provide them with essential air connectivity until such routes becomes viable. A complete study on this subject is called for, which might lead to the creation of another regulator for the airline sector.
The author is chairman of the International Foundation of Aviation, Aerospace and Development
sanat_kaul@hotmail.com
Pilot strike, bird strike
Sep 18, 2009
Pilots of Jet Airways were not the first to engage in collective bargaining. Air India Pilots had, in fact, developed the fine art of bargaining for their rights and advantages a long time ago. Their agreements were at times peculiar with benefits like quality of hotels or travel by limousines. They were also able to control recruitment or internal training. They were declared by a court order as ‘Workmen’ and came under Workmen’s Compensation Act even though theirs were one of the highest paid jobs in India before liberalisation.
Unlike pilots, strikes by air traffic controllers, who incidentally are government employees, have not been so successful. The last strike by ATCs in India in 1999-2000 was successfully broken and they were brought under the ambit of Essential Services Maintenance Act (Esma). Air force controllers were also brought in to assist.
But the case of pilots is qualitatively different from controllers as pilots are licensed separately for each type of aircraft and one pilot cannot switch from one to another. And an air force pilot cannot fly a civil plane.
Wildcat strikes by airline unions have in some cases led to their decline. Jet is today considered the best airline in India in quality of service and punctuality. However, it takes very little to lose the benefit of public perception when pilots suddenly strike. One major factor in Air India’s decline has been the erratic behaviour of its pilots. Handling of pilots and their unions is a major HRD function. Sudden sacking of pilots can result in a strong backlash. There are many examples of the same world over and it cannot be wished away.
While the right to protest and strike is an inherent right, industrial action by crucial players in the economy harms and disrupts the economy. At any rate, the mass sick leave by 400 pilots was not justified. India is a trillion dollar, fast growing economy, and such disruptions have economic repercussions. It is, therefore, a moot point whether such a disruption can come under the Esma.
The author is chairman, International Foundation for Aviation & Development (India Chapter) and India’s former representative to ICAO
Pilots of Jet Airways were not the first to engage in collective bargaining. Air India Pilots had, in fact, developed the fine art of bargaining for their rights and advantages a long time ago. Their agreements were at times peculiar with benefits like quality of hotels or travel by limousines. They were also able to control recruitment or internal training. They were declared by a court order as ‘Workmen’ and came under Workmen’s Compensation Act even though theirs were one of the highest paid jobs in India before liberalisation.
Unlike pilots, strikes by air traffic controllers, who incidentally are government employees, have not been so successful. The last strike by ATCs in India in 1999-2000 was successfully broken and they were brought under the ambit of Essential Services Maintenance Act (Esma). Air force controllers were also brought in to assist.
But the case of pilots is qualitatively different from controllers as pilots are licensed separately for each type of aircraft and one pilot cannot switch from one to another. And an air force pilot cannot fly a civil plane.
Wildcat strikes by airline unions have in some cases led to their decline. Jet is today considered the best airline in India in quality of service and punctuality. However, it takes very little to lose the benefit of public perception when pilots suddenly strike. One major factor in Air India’s decline has been the erratic behaviour of its pilots. Handling of pilots and their unions is a major HRD function. Sudden sacking of pilots can result in a strong backlash. There are many examples of the same world over and it cannot be wished away.
While the right to protest and strike is an inherent right, industrial action by crucial players in the economy harms and disrupts the economy. At any rate, the mass sick leave by 400 pilots was not justified. India is a trillion dollar, fast growing economy, and such disruptions have economic repercussions. It is, therefore, a moot point whether such a disruption can come under the Esma.
The author is chairman, International Foundation for Aviation & Development (India Chapter) and India’s former representative to ICAO
Tuesday, June 18, 2019
Airport noise
2010-06-17
The Delhi High Court order of February 2010 to DGCA regarding aircraft noise impacting the patients in the Indian Spinal Injuries Centre is the start of a new set of issues for the aviation industry. It is interesting to note that noise, as a subject, has been missing from Indian sensitivities. Loud blaring music played at weddings, parties and religious institutions, unnecessary blowing of car horns and railway trains passing habitation, blowing their shrill whistle are some issues that have not yet been at the forefront of Indian sensitivities. In the western world, noise pollution is as big a nuisance as water pollution and public sentiment on noise is very strong.
Aviation noise has become a big issue in developed countries. Many cities around the world close their airports at night so that the neighbourhood can sleep in peace. However, one has not heard of the railways or motorways closing down due to noise pollution.
The movement against noise pollution is a neighbourhood protest movement and has local political sensitivities. Many airports have gone under ‘night curfew’ because of such protests. The International Civil Aviation Organisation, taking this into account, has looked into various aspects of the problem and has managed, over the years, to ensure that aircraft engines become much quieter and landing procedures at airports be improved to cause the least amount of noise impact on the neighbourhood. However, whenever it came to the issue of making air laws or ‘standards’ on noise issues, the industry hesitated. In fact, India has been the leading country in this respect, but has always found the developed countries blocking it. The issue is simple: If all the countries chose to, unilaterally, close down their airports at night then it will be difficult to operate non-stop long-haul flights, especially with new aircraft that can fly non-stop for 14-15 hours. It also reduces the capacity of airports, aircraft and air routes, many of which are already congested with increased air travel.
It is also true that most airports in the world are old and were constructed outside the cities. It is the cities that have grown around the airports.
This is also true of India. Palam in Delhi and Santa Cruz in Mumbai were outside city limits when they came up. Property developers and investors saw the opportunity for price escalation near the airport. Hence, most property development has taken place with full understanding that noise will be a factor. However, having purchased the property, owners form associations and NGOs protest against the noise.
Aircraft noise has come down over the years due to reduction in engine noise, while the number of aircraft landings and take-offs has gone up. To resolve the issue of noise, some airports have also undertaken to provide noise reducing windows in the neighbourhood, from their own fund, besides changing procedures for landing and take-off.
The closing down of airports at night (night curfew) has implications for other countries. The US and the European Union have fought bitterly over this issue. The EU had objected to US aircraft with old noisy engines (mainly cargo) landing at night in Europe. When the US offered to put ‘hush kits’ or silencers, the EU still did not budge. It was finally resolved in ICAO by a compromise solution.
In the current case in Delhi, the spinal injuries hospital has gone to court seeking the courts’ intervention. They claim that aircraft noise is having an adverse impact on their patients as the hospital is located near the flight path. It is not clear why they chose to put up a hospital in the first place at the said location, when they were aware of the noise emanating from the airport. The high court in its judgement has stated that “some immediate measures be taken so that the residents should not suffer”.
There is no easy way out of this problem. However, it is clear that those who have property or reside in an area impacted by aircraft noise have done so voluntarily, since the airport has been in existence much longer. It is also difficult to claim that they did not know that flight movements will increase, as we all know that growth in civil aviation is a reflection of economic growth and we should have anticipated it.
While I would not recommend a closing of airstrip or night curfew, DGCA should order that only aircraft with new engines, which produce less noise, are allowed to land at night.
The author is chairman of the International Foundation of Aviation, Aerospace and Development (India Chapter) sanat_kaul@hotmail.com
The Delhi High Court order of February 2010 to DGCA regarding aircraft noise impacting the patients in the Indian Spinal Injuries Centre is the start of a new set of issues for the aviation industry. It is interesting to note that noise, as a subject, has been missing from Indian sensitivities. Loud blaring music played at weddings, parties and religious institutions, unnecessary blowing of car horns and railway trains passing habitation, blowing their shrill whistle are some issues that have not yet been at the forefront of Indian sensitivities. In the western world, noise pollution is as big a nuisance as water pollution and public sentiment on noise is very strong.
Aviation noise has become a big issue in developed countries. Many cities around the world close their airports at night so that the neighbourhood can sleep in peace. However, one has not heard of the railways or motorways closing down due to noise pollution.
The movement against noise pollution is a neighbourhood protest movement and has local political sensitivities. Many airports have gone under ‘night curfew’ because of such protests. The International Civil Aviation Organisation, taking this into account, has looked into various aspects of the problem and has managed, over the years, to ensure that aircraft engines become much quieter and landing procedures at airports be improved to cause the least amount of noise impact on the neighbourhood. However, whenever it came to the issue of making air laws or ‘standards’ on noise issues, the industry hesitated. In fact, India has been the leading country in this respect, but has always found the developed countries blocking it. The issue is simple: If all the countries chose to, unilaterally, close down their airports at night then it will be difficult to operate non-stop long-haul flights, especially with new aircraft that can fly non-stop for 14-15 hours. It also reduces the capacity of airports, aircraft and air routes, many of which are already congested with increased air travel.
It is also true that most airports in the world are old and were constructed outside the cities. It is the cities that have grown around the airports.
This is also true of India. Palam in Delhi and Santa Cruz in Mumbai were outside city limits when they came up. Property developers and investors saw the opportunity for price escalation near the airport. Hence, most property development has taken place with full understanding that noise will be a factor. However, having purchased the property, owners form associations and NGOs protest against the noise.
Aircraft noise has come down over the years due to reduction in engine noise, while the number of aircraft landings and take-offs has gone up. To resolve the issue of noise, some airports have also undertaken to provide noise reducing windows in the neighbourhood, from their own fund, besides changing procedures for landing and take-off.
The closing down of airports at night (night curfew) has implications for other countries. The US and the European Union have fought bitterly over this issue. The EU had objected to US aircraft with old noisy engines (mainly cargo) landing at night in Europe. When the US offered to put ‘hush kits’ or silencers, the EU still did not budge. It was finally resolved in ICAO by a compromise solution.
In the current case in Delhi, the spinal injuries hospital has gone to court seeking the courts’ intervention. They claim that aircraft noise is having an adverse impact on their patients as the hospital is located near the flight path. It is not clear why they chose to put up a hospital in the first place at the said location, when they were aware of the noise emanating from the airport. The high court in its judgement has stated that “some immediate measures be taken so that the residents should not suffer”.
There is no easy way out of this problem. However, it is clear that those who have property or reside in an area impacted by aircraft noise have done so voluntarily, since the airport has been in existence much longer. It is also difficult to claim that they did not know that flight movements will increase, as we all know that growth in civil aviation is a reflection of economic growth and we should have anticipated it.
While I would not recommend a closing of airstrip or night curfew, DGCA should order that only aircraft with new engines, which produce less noise, are allowed to land at night.
The author is chairman of the International Foundation of Aviation, Aerospace and Development (India Chapter) sanat_kaul@hotmail.com
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