And another airline bites the dust

The line from the famous song by Queen (Farrokh Bulsara), “Another One Bites the Dust”, appears to be the swansong for another airline in India. In the 1990s, an airline with promise, Damania Airways, went bust. This week, the Wadias declared insolvency for their airline, Go First, bringing down the curtains on another airline company. In its wake, we have hundreds of passengers, pilots and cabin crew stranded in various locations, and thousands of employees who have been left in the lurch with a long legal battle ahead of them to salvage what is owed to them. Employees of Kingfisher Airlines and Jet Airways are still struggling to get their dues while their owners and promoters live a life of luxury with zero accountability.

Are airlines and their owners/promoters the only ones to blame for these failures? I would put the blame squarely on the Ministry of Civil Aviation and its puppet, the Directorate General of Civil Aviation (DGCA). The regular chest thumping acts where there are proclamations of India being the ‘fastest growing aviation sector’ also turn a blind eye to serious deficiencies in safety, the financial security of airlines, oversight audits by the DGCA to assess the financial health of airlines, and last but not the least, the inflated numbers game they play to project exponential growth in the aviation sector.

A story of distress

The last 30 years have seen the failure of Damania Airways, NEPC Airlines, Air Deccan, Air Sahara, Paramount, Kingfisher, Jet Airways and several other smaller airlines in the aviation sector in India.

In 2008, the financial world’s collapse resulted in problems for major airlines. The Boeing representative made a statement during the Singapore Airshow in 2009 that India has space for just three airlines and that consolidations and mergers would take place.

Back in India, crony capitalism ensured that the favoured lot were never questioned and banks kept pumping in funds to aid non-performing assets. A DGCA audit of Kingfisher Airlines indicated a clear case of deep financial stress. As in the DGCA’s normal procedure, the reports were consigned to the dustbin. There were similar results for Jet Airways before its collapse too. The airline’s board was loaded with former Ministry of Civil Aviation and DGCA officials, just to give the reader an example of how airlines in India operate and hoodwink the public. The media helped in dishing out the figures and the numbers handed out to them without due diligence or any cross checks being done.

The DGCA’s Civil Aviation Requirement for Scheduled Transport Operations clearly spells out the minimum requirement for starting/running an airline: finance, crew numbers, other staff and route projections. Yet, those setting up airlines announce grandiose plans with the blessings of the Ministry and the DGCA, without proven financial security, and without a minimum number of pilots, engineers and cabin crew. Has anyone checked whether the numbers projected and numbers that actually materialised have matched? Has anyone checked why India pays the highest lease charges for aircraft when compared to other countries? Has the DGCA, the so-called regulator, ever taken action against those who make and come up with false projections and numbers? Pleasing the Minister and pandering to the ego of the government is not going to prevent another airline going bust.

After the worst of the COVID-19 pandemic was over, it was obvious that every airline in India was deep in the red. Areas that take a hit for airlines in India include training and safety. Airlines know that as long as their umbilical cord is connected to the Ministry of Civil Aviation, the regulator is a mere facilitator. Has the DGCA done a financial audit of all the airlines in India and has it published its findings?

Warning signals

The number of aircraft that have been mothballed in several airports in India and the number of accidents and serious incidents over the months have not raised a red flag. Passengers have been lucky that more lives have not been lost. This false numbness is likely to be mushrooming shortly.

Leasing companies repossessing aircraft due to non-payment of lease charges and airports requiring cash and carry operations from an airline for airport and fuel charges are all clear indications that the financial health of the airline is in a state of deterioration. Another clear pointer is the cancellation of flights due to “operational reasons”.

In simple terms, it means that there is a shortage of crew. Will the DGCA publish the data on flight cancellations because of crew shortage? Will it take the bold step of preventing airlines from acquiring more aircraft until they can show that they have sufficient numbers of crew for continuous scheduled operations without any flight disruptions?

Revamp aviation policy

What is urgently required in Indian aviation is transparency and accountability. This includes not just the airline owners and promoters but also the Ministry of Civil Aviation, the DGCA and the officials concerned. The day is not far off when another favoured and propped up airline is going to lose its wings. Go First is just the new beginning. And it is not going to be the last. A complete revamp of India’s civil aviation policy is required. We have seen the charade of Jet Airways 2.0, where some people have skimmed from the top and pulled wool over the eyes of unfortunate employees waiting for their legitimate dues. To begin with, they should enforce a ban on any official of a failed airline from holding managerial posts in another airline. Airlines should also be asked to have a corpus fund locked up to meet the dues of employees and passengers in the event of an airline closing down. The sudden announcement by Go First of operations being put on hold is like the announcement of demonetisation, in 2016. Do people deserve this disservice?

India is a goldmine for tourism. Aviation is a sector that is important to cash in on this. But the way it has been mismanaged and killed makes one wonder whether we can ever reach the potential to become the fastest growing sector. We need professionals with knowledge to run the sector. The way Air India is heading, I worry for another venture. My empathies for J.R.D. Tata. The vision he had for aviation in India is crumbling rapidly.

The proprietors of Go First declaring insolvency is part of a familiar aviation story in India: of serious deficiencies in the sector