India World’s Third Largest Growing Domestic Aviation Market, Says Economic Survey

During the 2007-08 to 2016-17 period, domestic passenger traffic registered a compound annual growth rate (CAGR) of 9.89 per cent

New Delhi: With the civil aviation sector witnessing “considerable progress”, India has become the world’s third largest domestic aviation market in terms of the number of tickets sold, according to the Economic Survey. To connect unserved and under-served airports, the government has come out with regional connectivity scheme UDAN (Ude Desh ka Aam Naagrik) and flights on many routes have commenced under this initiative.

“India is the 3rd largest and the fastest growing domestic aviation market in the world in terms of number of domestic tickets sold. In 2016-17, annual growth in domestic passenger departures was 23.5 per cent as compared to 3.3 per cent in the US and 10.7 per cent in China,” said the Survey tabled in Parliament today.

During the 2007-08 to 2016-17 period, domestic passenger traffic registered a compound annual growth rate (CAGR) of 9.89 per cent.

“There has been considerable progress in Roads, Railways, Metro Rail, Shipping, Civil Aviation, Power and Logistics Infrastructure Sectors that is expected to step up the growth momentum in the short term,” it noted.

With respect to revival of airstrips and airports, the Survey said that would be “demand driven” and would depend on the firm commitment from airline operators as well as from respective state governments.

“Provision of Rs. 4,500 crore for revival of 50 unservedvand under-served airports/ air strips has been taken up with budgetary support of government to be completed by December 2018,” it said.

In the current fiscal till September, domestic airlines carried 57.5 million passengers, a growth rate of 16 percent over the year-ago period.

During this period, scheduled Indian and foreign carriers ferried 29.2 million passengers to and from India — a growth of 9 per cent compared to the same period a year ago.

“During this period, the domestic air cargo handled was 0.61 million MT showing a growth of 10.27 per cent over the corresponding previous year time period, and international air cargo handled was 1.07 million MT showing a growth of 19.02 per cent,” the survey said.

Helicopter Flights Coming Under Udan Scheme, Says Civil Aviation Minister

State-run Airports Authority of India have issued “Letter of Awards” for 90 proposals involving around 325 regional connectivity routes which were received under the second round of the Udan scheme

NEW DELHI: The government today awarded contracts to 15 firms to operate flight and chopper services under the second round of its air regional connectivity “Udan” scheme.

State-run Airports Authority of India (AAI), the implementing agency of the scheme, issued “Letter of Awards” for 90 proposals involving around 325 regional connectivity routes which were received under the second round of RCS-Udan.

Subsequently, under the second phase, flight operations are expected to connect destinations like Kargil, Darbhanga, Pakyong (Gangtok) and Cooch Behar.

“Udan-II has addressed the problem of (air connectivity in) difficult areas (which are) basically areas with hilly tracks, where road connectivity is low or probably has no train connectivity,” Civil Aviation Minister Ashok Gajapati Raju said at an event held here.

“We will connect 29 unserved airports, 13 underserved airports to 36 served airports and 31 helipads. This is the first time that helicopter (services) are coming under Udan,” he said.

According to the minister, Udan-II will connect 43 airports and helipads in priority sectors like the north-east and the hill states.

Mr Raju said 17 applicants, including airline and chopper companies, had sent their proposals for a total of 502 routes in the second phase of the scheme. In total, 73 unserved or underserved airports and helipads will be provided services through the second phase.

The ministry awarded new routes to SpiceJet, IndiGo, Jet Airways, Turbo Megha Airways and Pawan Hans, among others.

SpiceJet Chairman and Managing Director Ajay Singh said, “We see tremendous potential in the routes that we have been awarded today and look forward to beginning operations very soon.”

SpiceJet has been awarded 17 proposals and 20 new sectors under the second round of bidding.

Why Pawan Hans, India’s national carrier, has a disastrous safety record

There are only two reasons, reckons a former captain who flew choppers of the Indian Air Force, that any investigation into a helicopter crash in the country can come up with: pilot error or bad weather.

“90{f32dc76102757d19df9131cdc28115d9989856b4a44e5e08e1d600a023141750} of the time, the hapless pilot is crucified,” says Sharma (name changed on request). “It’s amusing to know that this time a ‘sabotage’ balloon is being floated,” he fumes, alluding to the crash involving an ill-fated chopper of Pawan Hans off the coast of Mumbai on January 13, killing all seven on board.

Though preliminary investigation hint at sabotage — the possibility of flammable material in the cargo — nothing tangible is likely to come of it. Reason: 16 of the 21 crashes of the national carrier have been attributed to pilot error and the rest to bad weather.

“Blood is on their hands,” alleges Sharma, who worked for 16 years in India’s biggest helicopter company, Pawan Hans, in which the government owns 51{f32dc76102757d19df9131cdc28115d9989856b4a44e5e08e1d600a023141750} and the rest held by state-owned Oil and Natural Gas Corporation.

“No heads would roll, and Pawan Hans will remain a flying coffin,” laments the former pilot, who worked with the Air Force for over a decade. The most damning thing about the latest tragedy, he points out, is the fact that the chopper was on its first off-shore sortie after a two-week-long routine ‘T’ inspection, which is carried out after completing 600 hours of flying.

“Imagine a chopper crashing after coming straight from servicing.”

Troubled History Pawan Hans’ killer past is graphic: 67 deaths in 21 crashes since 1990. Every crash reinforces its tainted image.

“Pawan Hans is a dangerous company,” says aviation expert Captain Mohan Ranganathan, who alleges that investigations after crashes involve cover-ups and nobody is held accountable. The chopper company is run by the government, which controls the aviation regulator DGCA.

“Any other operator, anywhere in the world, would have lost the license to operate and the officials would have been sent behind bars,” says Ranganathan, “But not in India.”

The carrier’s troubled history, point out experts, has a lot to do with its wretched beginning in October 1985, when it was formed as the Helicopter Corporation of India. Most of the two-dozen British Westlands inducted into its fleet started showing signs of trouble: engine problems, oil leakages and faulty sensors. Three years later, the company recorded its first crash in July 1988.

A Westland crashed in Jammu and Kashmir, killing all seven occupants. A month later, a Dauphin flew into the sea, killing eight passengers and two pilots. In February 1989, another chopper crashed. Next month, government removed 53 defective engines from the Westlands. In May, 10 more were removed prematurely.

In a 2015 corporate presentation by Pawan Hans, the company admitted to weaknesses it has been grappling with, be it industrial relation problems leading to business shifting to rivals or inability to adopt flexible management policies as it is a PSU. The list highlighted and gave an official stamp to all the ills that experts had been repeatedly pointing out over the last two decades. The presentation also underlined potential threats faced by the national carrier such as ageing fleet and losing market share.

Blame Game Though the disease was diagnosed, nothing was done to fix the bug. But that has been a grim tradition. Pawan Hans ignored warnings from the Kaushik Committee report of 1991 and again when the committee revisited its recommendations in 2005.

In most of the cases where the investigations are over, the report pointed out, pilots are blamed for the accidents, a conclusion easily drawn from the available evidence. The accountability of the operator is never assigned, even indirectly. The operating conditions and other external factors are also not considered, the report observed.

While maintaining that suspecting the capability of the pilot and blaming him for the accident may not be incorrect, the report emphasised that the operator cannot evade responsibility for not ensuring proper conduct of recurrent training, maintenance of proficiency and competency of the pilot for the task. It is possible that commercial interest may have forced an operator to overlook or circumvent rules, directly affecting flight safety, a major factor in an accident, but may not be detectable during an investigation.

“Operators need to follow the laid-down rules judiciously and be conscientious of their responsibilities and accountability,” the Kaushik Committee report concluded. “Since it is a sarkari company, it’s debatable whether DGCA has the flexibility to be able to exercise adequate safety oversight authority over Pawan Hans,” says Shakti Lumba, aviation industry veteran and former vice-president of Air India and IndiGo.

Since the company was never structured as an aviation company catering to civilian needs, public safety may not have been as important a criterion as it would be for an airline. Also, that the organisation is headed by an IAS officer and not a technocrat might have an impact on the way Pawan Hans works.

 

Lumba alleges that apart from the fact that an IAS officer doesn’t have any knowledge or expertise on aviation, which could lead him to be more mission-oriented, cost cutting and a sharp focus on profit might put safety oversight or culture on the backburner.

“Most of the IAS ‘babus’ come for a picnic at PSUs and go back after a couple of years and have nil accountability,” he says. Whether their tenure in the PSU is successful or not has little effect on their career path, he adds.

Lumba also rubbishes the theory of rotatory wing aircraft (helicopters) being less mechanically reliable than fixed wing aircraft due to their complexity. “It doesn’t mean they are unsafe. Choppers are being successfully used globally,” he says, adding that Pawan Hans’ dismal safety record springs from aging fleet, high cost of maintenance and wear and tear of the choppers.

A serving Pawan Hans pilot, requesting anonymity, alleges another cardinal sin committed by the company: cost cutting at the cost of maintenance. While revenue dipped by Rs 77 crore between 2014-15 and 2015-16, profit fell by just Rs 2 crore. “How are they maintaining profitability when topline has been eroding?” he asks.

The company’s balance sheet of the last five years lights up another grim statistics: maintenance as a percentage of total expenditure in 2014-15 is same as what it was in 2011-12 — 25{f32dc76102757d19df9131cdc28115d9989856b4a44e5e08e1d600a023141750}. While in FY 2011-12, it stood at Rs 108.57 crore, for 2014-15 fiscal, it spent Rs 119.88 crore: a paltry increase of over Rs 10 crore in three years.

“Look at the ageing fleet of Pawan Hans. The amount spent is barely enough to keep the fleet healthy,” adds the Pawan Hans pilot.

Security Slip-ups
A dip in the headcount might have also helped the company in maintaining profit: employee strength was 799 in March 2016 from 869 in fiscal 2015. Though Pawan Hans maintains that it has a bloated headcount — 20 employees per helicopter, way above global industry average of 5-6 employees per helicopter — many serving officials contend that there is widespread discontentment among pilots and engineers due to huge salary disparity between what they and pilots in private airlines draw.

“Which airline company has flight allowance for every trip?” asks another former Pawan Hans pilot. “You want the pilots to do the quantum of work that an elephant does but at a donkey’s salary,” he grumbles. What has added to stress and resentment is the one-year notice period for pilots and six months for co-pilots if they wish to leave the job.

“Which company would wait for a year to hire you?” asks the above official, adding that the move implemented last August has badly affected pilot morale.

It’s not only the staggering number of accidents that has put Pawan Hans under intense public scrutiny, there are other glaring security slip-ups as well.

In a span of just three years — 2014 to 2016 — Pawan Hans had 38 “incidents”. The report, based on the findings of an RTI by an activist, defines an incident as an occurrence that could affect aircraft safety.

The highest number of incidents, the report added, were 17 in 2016, though number of flights operated per year came down from 1.06 lakh in 2014 to 78,856.

The callous disregard for safety is not confined to Pawan Hans. It is part of the government-owned company syndrome.

For Pawan Hans, there is an urgent need for a deep cleansing of the organisation and fleet. But that will have to start at the top. Only the government is in a position to radically reform the nation’s biggest helicopter carrier before it crashes for good.

 

 

Air Safety is Priority, Says Amber Dubay India Head of Aerospace and Defense, KPMG in his interview

Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG, tells us that with spread of aviation across the country through the government’s ambitious Regional Connectivity Scheme (RCS), the challenge of enhancing safety structures and procedures has increased manifold

India is on a modernisation spree of its aviation sector. What are the challenges regarding safety issues?

Safety challenges will remain the same despite growth in aviation. Some of the main factors include ensuring airworthiness of aircrafts in operation and maintenance of other equipment (ground equipment, navigation equipment, etc.), keeping cognizance of human performance limitation, ensuring maintenance of security processes and ensuring adequate communication amongst all aviation stakeholders.

The real issue that India is experiencing, thanks to the high growth phase in traffic, is that adequate structures and procedures are yet to be build to deal with the scale of errors and violations that would occur. Oversight of the aforementioned activities would have to become more robust in order to ensure safe operating levels.

Ensuring safety assurance at the level of all operators along with requisite oversight by regulatory authorities (Directorate General of Civil Aviation [DGCA] and Bureau of Civil Aviation Security [BCAS]) is the challenge. This challenge is enhanced manifold with the spread of aviation across the country through the government’s ambitious RCS initiative.

How is the challenge being addressed by different stakeholders in India?

The challenge of dealing with this kind of growth is not intrinsic or restricted only to India. There are adequate procedures and guidance available globally to act as reference points for India.

The stakeholders (Ministry of Civil Aviation [MoCA], regulators, Air Navigation Service [ANS] providers, airline operators, and Maintenance, Repair and Operations [MRO] operators) have taken up the task of addressing the safety issue within their own spheres of operation.

An example of this is the effort being undertaken by stakeholders towards implementation of GPS Aided Geo Augmented Navigation (GAGAN). Developed by Indian Space Research Organisation (ISRO) in conjunction with Airports Authority of India (AAI), GAGAN provides highly accurate satellite-based guidance to aircrafts and obviates the requirement to have ground-based navigation equipment. This coupled with Automatic Dependent Surveillance-Broadcast ADS-B (Out) will push the safety envelope across not only India but also across most parts of Africa and Asia.

The International Civil Aviation Organization (ICAO) conducted a 10-day audit of India’s aviation regulator in November. It placed India in its list of 13 worst-performing nations in terms of air safety in 2012. Will India fare any better this time? We believe MoCA and DGCA are taking adequate steps to address the adverse findings of previous ICAO reviews. Things may get better with time. Once 90 percent of DGCA processes become automated and online, it will free their bandwidth for more extensive field inspections, without going overboard. That may lead to a better oversight of adherence to safety norms.

How is the rapid modernisation straining safety issues?

More than rapid modernisation, the increased utilisation of aircrafts, airport infrastructure, non-availability of skilled manpower, etc., are straining safety structures.

Even though such growth is highly welcome, its quantum was not foreseen. As a result, the internal safety control and safety assurance structures of the operators along with regulatory oversight structures are over-stretched. It needs to be addressed on priority. Any unfortunate incident involving loss of lives can set Indian aviation back by five to ten years.

How far is the institutional and regulatory framework geared up to implement a robust safety system in Indian aviation?

The DGCA is undertaking a comprehensive review of the regulations to ensure relevance and practical implementation.

BCAS has also taken steps to ensure a seamless travel experience while maintaining security standards. The removal of hand baggage tags is welcome. We may soon shift to biometric checks and paperless travel. Even immigration checks may go digital.