Tag Archives: civil aviation

India goes for No-Fly List for on-board disruptive behaviour by passengers

Newsroom24x7 Network

Union Minister for Civil Aviation Ashok Gajapathi Raju Pusapati briefing the media on the proposed Civil Aviation Requirements regarding Handling of unruly/disruptive passengers, in New Delhi on September 08, 2017. Minister of State for Civil Aviation, Jayant Sinha and Secretary, Ministry of Civil AviationR.N. Choubey are also seen.

New Delhi: Passengers will figure in No Fly List if they resort to disruptive and unruly behaviour on-board.

The Ministry of Civil Aviation today unveiled rules to tackle on-board disruptive and unruly behaviour by passengers.

Briefing the media in New Delhi today, Minister for Civil Aviation P Ashok Gajapathi Raju said that the new rules will allow for the formation of a national, No Fly List of such unruly passengers.

The Minister said that the promulgation of the No – Fly List in India is unique and first-of-its-kind in the world. Emphasizing the Government’s commitment for ensuring safety, Raju said that the concept of the No-Fly List is based on the concern for safety of passengers, crew and the aircraft, and not just on security threat.

The DGCA has revised the relevant sections of the Civil Aviation Requirement (CAR Section 3, Series M, Part Vl on “Handling of Unruly Passengers) to bring in a deterrent for passengers who engage in unruly behaviour on board aircrafts. The revision has been done in accordance with the provisions of Tokyo Convention 1963.

The revised CAR deals with unruly behavior of passenger on-board aircrafts. Unruly behavior of passengers at airport premises will be dealt with by relevant security agencies under applicable penal provisions. The revised CAR will be applicable for all Indian operators engaged in scheduled and non-scheduled air transport services, both domestic and international carriage of passengers. The CAR would also be applicable to foreign carriers subject to compliance of Tokyo Convention 1963.

Also speaking on the occasion the Minister of State for Civil Aviation Jayant Sinha said that the new rules have been promulgated after a lot of deliberation and consultation with all stakeholders. The focus has been on ensuring on board safety while maintaining an element of balance and safeguarding the interest of passengers, cabin crew and the airlines.

The revised CAR defines three categories of unruly behavior – Level 1 refers to behaviour that is verbally unruly, and calls for debarment upto 3 months; Level 2 indicates physical unruliness and can lead to the passenger being debarred from flying for upto 6 months and Level 3 indicates life-threatening behaviour where the debarment would be for a minimum of 2 years.

The complaint of unruly behavior would need to be filed by the pilot-in-command. These complaints will be probed by an internal committee to be set up by the airline. The internal committee will have retired District & Sessions Judge as Chairman and representatives from a different scheduled airline, passengers’ association/consumer association/retired officer of Consumer Dispute Redressal Forum as Members. As per the CAR provisions, the internal committee will have to decide the matter within 30 days, and also specify the duration of ban on the unruly passenger. During the period of pendency of the enquiry the concerned airline may impose a ban on the said passenger. For every subsequent offence, the ban will be twice the period of previous ban.

The airlines will be required to share the No-Fly list, and the same will be available on DGCA website. The other airlines will not be bound by the No-Fly list of an airline. The No Fly Lists will have two components – unruly passengers banned for a certain period based on examination of the case by the internal committee; and those persons perceived to be national security risk by the Ministry of Home Affairs. The latter component will, however, not be displayed on the DGCA website.

The revised CAR also contains appeal provisions against the ban. Aggrieved persons (other than those identified as security threat by MHA) may appeal within 60 days from the date of issue of order to the Appellate Committee constituted by MoCA comprising of retired Judge of a High Court of India as Chairman and representatives of passengers association/consumer association/retired officer of Consumer Dispute Redressal Forum and airlines as Members.

Air India caught in the trap of accumulated debt and losses

Lalit Shastri

Air_India_1
Air India 1 (courtesy: wikipedia)

Again the same old story of a sick Indian PSU – the dilemma over the supremacy of process over delivery, the inherent reluctance to change and too many self proclaimed advisers. And the omnipresent fear of the vigilance and audit setups even among those whose primary job is to find innovative solutions and often step into uncharted territories. Handling commerce in a sarkari (government) environment that too in a deeply sick company is definitely not an easy assignment – Ashwani Lohani, CMD Air India

Air India, which is India’s State owned national carrier, lacks a viable policy both for the domestic and the long haul sector. The airline is also devoid of a practical and commercially rewarding long-term fleet plan.

There is every indication that in coming years Air India’s annual losses would be stabilising at close to USD1 billion as for FY 2014–15, its revenue, operating loss and net loss were Rs 197.81 billion (US$ 3.0 billion), Rs 2.171 billion (US$32 million) and Rs.5.41 billion (US$81 million) compared to FY 2011–12, which were Rs. 147.13 billion (US$2.2 billion), Rs. 5.138 billion (US $77 million) and Rs. 7.55 billion (US$110 million).

Poaching of pilots by one of the private airlines is indeed a dirty game. What the poacher does not really realize is the damage it is doing to itself arising out of its unethical conduct. Unfortunately unethical conduct has become so deeply ingrained in the Indian psyche that it is treated as an acceptable behaviour though in our subconcious we always look down upon it. – Ashwani Lohani, CMD Air India

The combined losses for Air India and Indian Airlines in 2006–07 were Rs 7.7 billion (US$110 million). Following their merger, the losses went up to Rs. 72 billion (US$1.1 billion) by March 2009. In July 2009, State Bank of India was delegated the responsibility to prepare a road map for the recovery of the airline which resorted to selling three Airbus A300 and one Boeing 747-300M in March 2009 for $18.75 million to finance the debt. By March 2011, Air India had accumulated a debt of Rs.425.7 billion (US$6.4 billion) and an operating loss of Rs.220 billion (US$3.3 billion).

On the other side, we have the case of Emirates Group that operates across six continents with headquarters in Dubai with an 84,000 strong multi-national team comprised of over 160 nationalities achieved its 27th consecutive year of profit. Emirates’ revenues this year increased 7% to AED 89 billion, and profit increased 40% to AED 4.6 billion.

Similarly, an airline like Etihad Airways, the national airline of the United Arab Emirates, recorded the fourth consecutive year of net profitability and achieved its strongest financial results in 2014, posting a net profit of US$ 73 million on total revenues of US$ 7.6 billion, up 52.1 per cent and 26.7 per cent respectively over the previous year. The record performance, which marked the airline’s fourth consecutive year of net profitability.

Air India and its finances

Till 31 March 2014, Government of India had infused Rs.132,000 million by way of equity into the Company from the time the FRP was implemented. An amount of Rs.65,000 Million was provided in Union Budget for the Financial year 2014-15.

The Government infused Equity Capital of Rs 60,000 Million during 2013-14 thus brought the total paid up Capital to Rs.153,450 million. During the year 2014-15 the Government was expected to bring Equity Capital of Rs.71,060 million including the arrears of the earlier years but the Government could infuse only Rs.57,800 million.
Experts point out that apart from the cash infusion, the other cost of state ownership is that it impacts policy decisions and prevents market-based reforms to protect the national carrier. Now there is a new Organisation Structure approved by the Airliine Board and there is an Oversight Committee at the Government of India Level to ensure implementation of a Turn Around Plan (TAP) and closely monitor the actual performance.

More investments from the government side have made it harder to take decisions necessary to bail out Air India from its financial crisis. It has been noticed that the Government’s bureaucratic apparatus also lacks understanding and this has left an adverse impact on government response. For example, Along with demands for additional seats, the Union Civil Aviation Ministry receives requests for code shares and joint ventures. But in the absence of a clear-cut policy and dearth of expertise with relation to global airline commercial arrangements, the Ministry lacks the ability to respond keeping in perspective the prevailing trends.

Reflecting on the prevailing situation, Air India chief Ashwani Lohani, has observed on a social networking platform: “Again the same old story of a sick Indian PSU – the dilemma over the supremacy of process over delivery, the inherent reluctance to change and too many self proclaimed advisers. And the omnipresent fear of the vigilance and audit setups even among those whose primary job is to find innovative solutions and often step into uncharted territories. Handling commerce in a sarkari (government) environment that too in a deeply sick company is definitely not an easy assignment.” The airline chief of course expresses faith in a “supportive ministry” adding it indeed counts for a lot. He sums up the situation saying: “extremely difficult yet not an impossibility is perhaps the best way to describe the existing scenario that I find myself faced with.”

Lohani faces a huge challenge when it comes turning around the sick airline. Already USD3 billion has been invested under the turnaround plan to date (till mid-2015), while the carrier’s debt of over USD8 billion is more than twice its annual revenue, the funding required by the carrier is even greater than projected in its turnaround plan.

TAP entails both operational and financial turnaround of the Company. Based on the assumptions on TAP, a Financial Restructuring Plan (FRP) was prepared and implemented from 1 October 2011 which envisaged aligning of the debt repayments of the Company in line with the projected Cash Flows.

In tune with the TAP proposals:

  • The MRO and Ground Handling activities were hived-off and operationalised in February 2013
  • The HR Policy was reviewed across the Company and a new Organisation Structure was approved by the Board in order to right-size the position at various levels in the Organisation hierarchy.
  • An integrated IT System has been put in place for improving operational performance.
  • There has also been renewed focus on revenue generation through other services like Ground Handling Department/ Security Department by providing services to about 59 Customer Airlines at Indian Stations and Engineering Department.

Despite the stress on streamlining the HR Policy, under TAP, Air India is confronted with the problem of exodus of pilots. Reflecting on this problem the Air India chief says: “Poaching of pilots by one of the private airlines is indeed a dirty game. What the poacher does not really realize is the damage it is doing to itself arising out of its unethical conduct. Unfortunately unethical conduct has become so deeply ingrained in the indian psyche that it is treated as an acceptable behaviour though in our subconcious we always look down upon it. Yet I am sure that we would be able to beat this despicable behaviour by our sheer grit and commitment to the nation.”

Peter Harbison, Executive Chairman CAPA – Centre for Aviation has spelt out in clear terms is that the only reason the airline industry has survived is that it has paid its debts when they fell due. Servicing debt has been the key to survival. No matter how poor an airline company was as an equity investment, it almost always paid its creditors.

Besides, Harbison also points out: “Whether the equity owners were governments (“subsidy”) or private, most have effectively subsidised consumers in an increasingly competitive operating environment. Consequently, he points out that over the past year or so, some airlines have actually managed to break the brutal cycle of boom and bust.” Leaders in this conspicuous transformation have been the US majors, greatly aided by the tailwind of bankruptcy protection, followed closely by consolidation. Others too have scaled financial heights. IAG, transformed by strong and effective leadership; Qantas by a unique combination of transformative measures; and Japan Airlines, with no debt (in 2014, with a net debt to total capital ratio of -7%. This followed its bankruptcy filing in 2010 and subsequent recapitalisation in 2012, which has left it with a significant cushion against any future downturn).

Harbison goes on to emphasise, debt will always be a vital part of an industry which has to make such large capital expenditures relative to cash generated from operations. According to UBS data, between 2005 and 2014, a range of airlines tracked allocated an average of 89% of their cash inflow from operations to capital investment annually. and on the other extreme we have Air India that sells aircrafts to service debt.

In Asia Pacific, almost every major airline group is reducing its indebtedness, including Virgin Australia, Qantas, Singapore Airlines, EVA Air, Garuda, Korean, China Airlines, China Eastern, China Southern, ANA, Cathay Pacific, Cebu Air, Air China, Air New Zealand and AirAsia. Even JAL, already in a net cash position, is modestly repaying debt. These are made possible through improving earnings and in some cases, lower levels of capital expenditure (Airline Leader – Issue 31: Nurturing the piggy bank while the good times last).
financial position of Airlines in IndiaCloser home, The domestic aviation market share numbers for May 2015 showed IndiGo flew more passengers than Jet Airways and Air India combined. IndiGo in fact accounted for two-thirds of passenger growth.

Total international traffic to/from India also grew at 9.0% in FY2015, however Indian carriers grew slightly faster at 10.2%. Jet’s growth rate was around twice that at 20.6%, with the airline accounting for close to 75% of the incremental international traffic carried on Indian airlines.

CAPA in its report – Aviation Sector in India 2015, points out that In FY2015 traffic increased and losses declined but this was largely a function of lower fuel prices. With the situation remaining constant for all Indian airlines, IndiGo saw strong growth in total revenue in FY2015 which crossed USD2.5 billion.

When a top-level bureaucrat was asked to comment on the performance of private airlines vis-a-vis Air India, he said besides professional merit what needs to be probed is whether or not those in Government had side-tracked the interests of Air India and were instrumental in doling out rewarding routes to the private players.

In a scenario that appears dismal for Air India, Lohani continues to be optimistic. Recounting the positives in Mid November, he posted on facebook: “So finally lord jagannath (our head of engg) gave us 60 planes to fly on the domestic sector today, up by almost 10 that we had 2 months back. And my head of operations has not been giving sleepless nights by ensuring smooth operations and the commercial guys trying their level best to touch 50 cr a day. Alnost everyone is putting in his best to pull AI out of the morass.The team is terrific and they shall do it I am absolutely certain and this strengthens my belief in the inherent goodness of men in general.”

Regarding the need to augment the airline fleet, this is what Lohani has to say: “So we have also decided to grow. 15 more planes shall be added to the domestic fleet in 2016, followed by another 15 that shall be replacements and would arrive in 2017. Meanwhile the international sectors would witness addition of 6 787’s and 3 777ER’s that would all arrive in 2017 and 2018. And this is just the beginning”, of course for the much awaited turn around.

Modi and Harper bring bilateral relations between India and Canada to a new level

Prime Minister of Canada Stephen Harper and Narendra Modi, Prime Minister of India, shake hands following a joint press conference in Centre Block on Parliament Hill.
Prime Minister of Canada Stephen Harper and Narendra Modi, Prime Minister of India, shake hands following a joint press conference in Centre Block on Parliament Hill.

Newsroom Desk

Ottawa, Ontario: Prime Minister of Canada Stephen Harper and Narendra Modi, Prime Minister of India, today witnessed the signing and finalization of six significant initiatives between Canada and India that will help to further advance bilateral relations between the two countries. They were joined by Ed Fast, Minister of International Trade.

Harper and Modi Wednesday also attended a reception at Toronto’s Ricoh Coliseum to celebrate the special relationship that exists between Canada and India. The event was part of Modi’s two-day visit to Canada, which includes stops in Ottawa, Toronto and Vancouver.

Hosted by the National Alliance of Indo-Canadians and attended by parliamentarians, dignitaries and members of Canada’s vast and vibrant Indian diaspora, the event provided Prime Minister Harper with the opportunity to pay tribute to a community that contributes so much to Canada’s cultural richness and economic strength. In his remarks,Modi expressed his continued commitment to further cementing the already strong bonds that unite Canada and India.

The historic visit by Prime Minister Modi to Canada combined with the number and scope of agreements signed today between our governments clearly demonstrate the commitment of both countries to taking bilateral relations to new heights – Prime Minister Stephen Harper

The initiatives announced today will promote greater collaboration between the two countries in the areas of civil aviation, railway transportation, education and skills development, space, social security and maternal, newborn and child health.

Canada and India have longstanding bilateral relations built upon shared traditions of democracy and pluralism, and on strong interpersonal connections with the approximately 1.2 million Indian diaspora community in Canada.

With bilateral merchandise trade valued at $6.3 billion in 2014 and bilateral service trade at over $1.5 billion in 2013, a market of more than 1.2 billion people, and a predicted economic growth of 7.5 per cent in 2015, India represents exciting opportunities for Canadian businesses.

The stock of two-way foreign direct investment (FDI) between Canada and India totaled approximately $4.4 billion in 2013. Of this, the stock of FDI in Canada from India is nearly $3.8 billion and the stock of Canadian FDI in India stood at $613 million.

New initiatives between Canada and India

Civil Aviation

Transport Canada will finalize a memorandum of understanding with India’s Ministry of Civil Aviation that will promote collaboration and cooperation in areas such as airport development, planning and management; aircraft certification; regional and general aviation development; aviation safety and security; and skills development. It will also create a civil aviation working group, bringing together industry stakeholders from both countries.

Rail

Transport Canada signed a memorandum of understanding with the Indian Ministry of Railways that will foster communication, sharing of information and exchange of best practices in rail transportation, and help create potential opportunities for Canadian private sector investment in rail development projects in India.

Education and Skills Development

Thirteen memoranda of understanding were signed between India’s National Skill Development Council and Canadian colleges and institutes in the fields of agriculture, apparel and textiles, automotive, aviation, construction, green economy, healthcare, hydrocarbons, information technology, telecom and electronics, sports sector, and water.

Space

The Canadian Space Agency (CSA) signed an updated memorandum of understanding with the Indian Space Research Organization (ISRO) that will in part recognize Indian launch capabilities for Canadian satellites. A memorandum of understanding between ISRO and the CSA on cooperation regarding outer space was first signed in 1996.

Social Security Agreement

The entry-into-force of the Canada-India Social Security Agreement will help eligible individuals qualify for retirement, disability or survivor benefits, and enable employees from Canada who are sent to work temporarily in India to continue to contribute to the Canada Pension Plan and be exempt from contributing to the Employees’ Pension Scheme of India.

Maternal, Newborn and Child Health

Grand Challenges Canada and India’s Department of Biotechnology, Ministry of Science and Technology announced an investment of $2.5 million toward five innovative projects on newborn and early childhood development in India.