News Backgrounder
India’s carriers bound for America
The U.S.’s Federal Aviation Administration has restored India’s category 1 safety rating, freeing the country’s carriers to expand in the U.S. market.
May 1st 2015
It took a year of exhaustive revaluation of its safety oversight, supported by a U.S consultancy group, but the effort proved worth it for India’s Directorate-General of Civil Aviation (DGCA). In April, the country’s civil aviation minister, Ashok Gajapathi Raju, announced the Federal Aviation Administration (FAA) of the U.S. had restored India’s safety rating to Category 1. Read More »
The upgrade is crucial for India’s international airlines. The U.S. is home to more than 1.5 million Americans of Indian origin, many of them affluent professionals, and is one of the subcontinent’s most vital growth markets.
After a visit to India earlier this year by U.S. president, Barack Obama, the two governments have been promoting stronger economic ties, a development that promises increased travel between the two nations, particularly in the lucrative corporate sector.
The FAA downgrade to Category II, imposed in January 2014, barred Indian airlines from adding destinations to the U.S. or changing aircraft types on routes into America. It was the result of several FAA concerns, which ranged from inadequate training for industry regulators to poor safety oversight and a shortage of flight inspectors.
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India’s path back to safety acceptability was assisted by a U.S.-based consulting firm, The Wicks Group, which took on a 12-month contract last June to assist India’s DGCA in restoring its Category 1 safety rating.
The contract was organized under a bilateral assistance program funded by the U.S. Trade and Development Agency (USTDA). In a statement on its website, The Wicks Group said the Category 1 achievement “is noteworthy due to the compressed time period in which it was accomplished and the size and scale of the DGCA organization, overseeing an aviation environment as large as the one present in India”.
Wicks consultants advised on India’s system of certifying air operators and aviation training organizations, the training of newly hired and existing inspectors, improving regulations and guidance materials in accordance with international norms and re-structuring some divisions of the DGCA.
Air India and Jet Airways, the two airlines flying to the U.S. from India can now increase flights to America. The downgrade’s removal also will help Indian carriers write code-shares with American partners.
It is understood Jet, which flies to Newark, New Jersey, will consider expanding its services to the U.S. It had to put plans to re-start New York flights and launch a Chicago service on hold after the downgrade was imposed.
However, Jet can co-operate with its part-owner, Abu Dhabi’s Etihad Airways, which flies to six U.S. destinations. Two of these routes, to Chicago and New York, are operated by Etihad using B777-300ERs that were first acquired by Jet Airways.
If the Indian government removes the controversial 5:20 rule, which prohibits India’s airlines from flying offshore until they have been operating for five years and have a minimum fleet of 20 aircraft, it is certain more Indian carriers will want to fly to the U.S. India’s new full service carrier, Singapore Airlines-TATA joint-venture Vistara, has said it wants to service America.
| Indian international airlines revamp their fleets India’s airlines might not reap immediate benefits from the restored FAA safety rating as they struggle to optimize their fleets to match route economics Jet Airways’ executive team said it had no plans to reduce its international operations, but sources have suggested management is considering either an outright sale or a sale and lease back of its wide-body fleet to raise cash and retire a portion of its significant debt. At press time, Jet had 22 wide-body planes (10 B777-300ERs and 12 A330-200s). Six A330s are on operating leases and the remaining 16 airplanes are on financial leases. Jet only uses five B777s and seven A330s with the other 10 aircraft leased to Etihad Airways and Turkish Airlines, respectively. Later this month, Jet will seek shareholders’ approval to raise up to $400 million from “issuing secured and/or unsecured, listed and/or unlisted non-convertible debentures and/or subordinated debt instruments”. Rival Air India is still deciding if it will convert some of its seven remaining B787-8 orders into commitments for the larger -9 variant. “We are in discussions with Boeing. We will not be paying any extra money for the bigger -9 planes and may induct less than seven planes. All of these are being discussed,” Air India managing director, Rohit Nandan, told The Economic Times. At press time the Delhi-based carrier operated 20 B787-8s, with the 21st airliner scheduled for service entry in June. India’s Financial Express earlier last month reported the flag carrier was losing money on all its B787-operated routes, but said five routes, including Delhi – Moscow were performing particularly poorly. |
