Financial stress in airlines may impact operational safety: Aviation regulators

| Updated on: Oct 09, 2012

The ongoing 49th conference of Director-Generals of Civil Aviation (DGCAs) of the Asia-Pacific region, being held in the Capital, provides a great opportunity for India to learn from what others are doing to tackle the twin issues of financial viability and airline safety.

From neighbouring Sri Lanka and Pakistan to the tiny island nations of Singapore and Australia, all seem to believe that financial stress in airlines could have a bearing on operational safety.

“Of course, there is a co-relation. Arrey Bhai, jitni shakkar dalo, utni hi mithas ayagee (the more sugar you add, the sweeter will be the product). In Pakistan, I do not directly look at financial aspects of airlines, but we do not give a licence to an airline if it has less than three aircraft,” said Nadeem Khan Yousufzai, Director-General Pakistan Civil Aviation Authority.

Concurring with his views, Sri Lanka’s DGCA and Chief Executive Officer, H.M.C Nimalasiri, said that financial stress could lead to a situation that could hurt the interest of the travelling public. He said while currently there was no department looking into the finances of airlines, the island nation’s Government had initiated a process of setting up a body to look into this aspect of airline operations. In Australia, apart from the DGCA, there is the Australian Securities and Investment Commission that looks into financial issues across sectors. “If you get to know that an airline is cancelling flights, is facing problems in giving refunds for tickets, paying cash for fuel that it was earlier getting on credit — the last one is the kiss of death — then you take note,” said John F. McCormick, Director, Aviation Safety, Australian Government.

But he cautioned that just because an airline was making a loss it did not mean that it was unsafe. “Sabena Airlines made a loss for each of the 70 years that it flew, but it did not have a single crash,” McCormick pointed out.

Airline regulators participating in the meeting felt that cutting back on safety was a tempting proposition. “Things like safety are like goodwill, they cannot be quantified,” McCormick added.


Published on October 09, 2012

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