DGCA’s move to keep air fares down isn’t fair

AK Sachdev | Updated on May 28, 2020

In these Covid times, when demand for air travel is high and passengers are willing to pay more, why regulate the fares? Airlines fares ought to be driven by market tractions

In March this year, the Lok Sabha passed the Aircraft (Amendment) Bill 2020, amending the Aircraft Act 1934; the Bill seeks to convert the Director General Civil Aviation (DGCA), currently an attached office of the Ministry of Civil Aviation (MoCA), from a regulatory status to a statutory one. Falling short of the establishment of a Civil Aviation Authority (CAA) with sweeping financial budgetary powers and autonomy, the Bill raises the DGCA’s authority somewhat, aiming to enhance the maximum limit of penalties it can impose for violations of legal provisions. However, the Bill still confines DGCA to carrying out regulatory and safety oversight functions in the civil aviation domain which has been the case so far.

Nonetheless, the DGCA has been, with all good intent, interceding in matters that do not fall directly under these areas. The term ‘regulatory’ is a broad one but it is hard to justify that its scope includes regulating airline fares which ought to be driven by market tractions. The stipulation of fare slabs for airlines is, thus, not a very welcome step as far as airlines are concerned. After all, the DGCA did not (or lacked the capability to) help airlines when cut-throat competition had pushed the fares so far down that most airlines were making losses.

Therefore, the attempt to keep fares down when demand is high, availability is low due to Covid-19 restraints, and passengers are willing to pay high fares is seen as a rather cruel move. Perhaps, as a trade off, the DGCA withdrew its circular on keeping the middle seat vacant on every flight — a measure seen as unsafe and currently under the Supreme Court’s consideration (the court has permitted middle seats to be occupied until June 6).

The air safety of passengers, especially against the Covid-19 background, has assumed high importance as India started flying on May 25. The government has gone to great trouble at all airports to implement measures to prevent Covid-19 infection spreading during any of the activities prior to, during, and after, a flight. It would be well-nigh impossible to ascertain if any infection did travel from one passenger to another during a flight and, hopefully, airline operations will climb up gradually to pre-Covid volumes.

Financial pressure

However, safety concerns other than Covid- related ones will persist and possibly swell. The reason is the financial pressure which Covid has put all airlines under and the consequential short-cuts they might be under temptation to take so as to cut costs. A worn-out tyre retained for just one more take off and landing, a leaky and slowly deflating nose oleo charged up for one more last flight before being put down for maintenance, a border line heavy landing not reported — the list is endless.

Under pressure, crew and managers can be pushed into taking decisions that pander to the dictates from top management, injecting successive weak links into a chain of acts of omission and commission eventually culminating in a catastrophic accident.

Accident investigations concentrate more on the actual failures that led to an accident and less on the financial aspects that may have been working behind the scenes well before the chain of events that actually led to the accident. It can be argued — quite convincingly — that if the parent airline’s financial state had been put under scrutiny in the weeks and months prior to the accident, there would have been some indication of an accident waiting to happen.

It is time safety audits of airlines include an element of financial audit as part of their regular surveillance to forestall such accidents.

The author is a former Chief Operations Officer of a domestic airline

Published on May 28, 2020

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