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Alarm bells are ringing over safety of airlines' operations due to severe financial stress faced by them. The Directorate General of Civil Aviation (DGCA) is starting a detailed financial surveillance of all airlines from Friday. Carriers that are found to be seriously strained after this survey would not be allowed to add any aircraft to their fleet till they meet all safety requirements for the existing fleet.
Also, the extension of such airlines' licences could come under cloud if the regulator finds that their financial capacity has degraded to such an extent that it would not be safe to allow them to fly passengers as per a report in TOI by Saurabh Sinha
DGCA chief Bharat Bhushan said: "We will finalise the modalities of the detailed surveillance shortly and begin the process from Friday. The focus will be on the airlines' economic viability and safety."
The concept of financial surveillance in India started in 2009 at the height of global recession and the consequent slowdown in India. The basic idea is to categorise airlines according to their financial health and keep a close watch on the fleets of the most strained ones. The reason: A broke airline is unlikely to be able to invest in keeping their fleets completely airworthy and safe by replacing or repairing parts that need attention.
However by the time the first surveillance result came, the economic environment had improved significantly and airlines were again going with packed planes. Incidentally, the two airlines that were found to be stressed then have emerged as the most severely strained even today. Two airlines, one regional and other national, were asked to shut operations till they met all safety norms. The two haven't started operations till now.
The past few months have again seen instances of airlines defaulting on payments to oil and airport companies and even deferring salary payments. In fact, pilots of one of the strained airlines had some time back written to the aviation ministry and pointed out that having professionals who have not been paid for months in the cockpit is a hazard.
Among the indicators used to determine financial health of airlines are: whether they have defaulted on payments, salaries and whether they are facing a high attrition rates because of this fact. "The problem is one of the stressed airlines is government-run and the other belongs to a highly influential business magnate. Will the government be able to take any real action against such airlines remains to be seen," said a senior commander.
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