Jyotiraditya Scindia faces 12 major challenges in civil aviation ministry cockpit
While Hardeep Singh Puri had presided over several developments in the Indian civil aviation sector, there are several issues that call for attention
Jyotiraditya Scindia has been made the new civil aviation minister following the Union Cabinet reshuffle effected on July 7. Hardeep Singh Puri, who had been in charge of the Ministry of Civil Aviation (MoCA) since May 30, 2019, would look after the petroleum ministry now. He will continue to hold the Ministry of Urban Development.
A total of 43 ministers were sworn in at the Rashtrapati Bhawan. As many as 36 new ministers joined the Cabinet while seven high-profile ministers quit. "I congratulate all the colleagues who have taken oath today and wish them the very best for their ministerial tenure. We will continue working to fulfill the aspirations of the people and build a strong and prosperous India. #Govt4Growth," Prime Minister Narendra Modi tweeted on July 7.
An alumnus of the St Stephen's College in Delhi, Harvard University and Stanford Graduate School of Business, Scindia has been a seasoned politician with a royal lineage, serving long stints as a Member of Parliament. He was the Minister of State (Independent Charge) for Power in the Manmohan Singh government from 2012 to 2014. His father Madhav Rao Scindia was also a Minister of Civil Aviation, in the PV Narasimha Rao government from 1991-1993.
Significantly, the MoCA would now have a Cabinet minister heading it. Puri was Minister of State (Independent Charge) in the ministry.
"Delighted to take the baton of the @MoCA_GoI from Sh @HardeepSPuri ji. I resolve to discharge my duties with earnestness & continue the good work undertaken by him," Scindia tweeted on July 9.
While Puri had presided over several developments in the Indian civil aviation sector, including expansion of Ude Desh ka Aam Naagrik (UDAN), privatisation of airports, push to what would be India's largest airport at Uttar Pradesh's Jewar, the process of selling off Air India, and indeed, a successful mega repatriation exercise in the form of the Vande Bharat Mission (VBM), there are several issues that are calling for attention. Here are 10 challenges that Scindia would face right away:
1. Turning around the Covid-hit fortunes
Aviation in India, as indeed aviation in the rest of the world, has been battered, bruised and flattened by the Covid-19 pandemic that broke out last year. Scheduled commercial domestic and international passenger flights were suspended in the wake of the pandemic, and a strict nationwide lockdown was imposed. While the ban on regular international air travel continues, domestic flights were allowed from May 25 last year after a two-month hiatus.
On May 31, or a week after the domestic aviation sector was reopened, there were just 1,003 flight movements and 89,271 footfalls at the Indian airports.
As domestic traffic started to pick up, the government raised the capacity limit to 45% by the end of June and to 60% in September. In November, airlines were allowed to hike capacity to 70%, and then on December 3, it was raised to 80%.
The government seemed highly optimistic that soon there would be a return to full capacity. However, the airlines were cautious about running at full capacity.
Then, faced with a drastic downturn in demand in the wake of a frightening Covid resurgence and stricter travel restrictions in several states, the Indian aviation sector, which was on a steady recovery path, slowed down considerably. Flight capacity was kept fixed at 80% of the pre-Covid numbers till May 31.
Airport footfall stood at 1,40,031 on May 31, 2021, according to MoCA data. There were only 1,684 aircraft movements. The traffic figures were alarmingly close to what they were exactly a year back.
Planes lined up at the Delhi airport. Image courtesy: Twitter/@DelhiAirport
This forced the government to walk backwards and revise flight capacity to 50% of pre-Covid levels, to ensure the viability of airlines faced with weak finances and a sharp fall in passenger load factors in the wake of the Covid surge. As the second Covid wave started showing signs of subsiding, the government on July 5 raised flight capacity to 65%, which would stay in force till July 31 or until further orders.
The new civil aviation minister would have his task cut out to bring Indian aviation back to its glory days. Even while a marked decrease in the country's Covid caseload has brought back demand, there is still a long way to go before the pandemic is well and truly brought under control. The fear of infection, therefore, is still palpable, and flyers are also put off by the cumbersome travel protocols, including mandatory Covid tests.
Scindia not only has to try to rev up demand in aviation and help in shoring up the finances of the airlines and other aviation service providers, including the Airports Authority of India (AAI), he also has to restore livelihoods that had been destroyed by the pandemic. Thousands of jobs have been lost, salaries have been cut and leave without pay introduced. Even the AAI has been planning to cut the perks of about 17,000 employees, ANI reported.
2. Fare capping
The government had introduced fare capping on May 21 last year, just before the resumption of domestic flights. Limits were placed on airfares through seven bands classified on the basis of flight duration. According to Puri, fixing floor and ceiling prices was an extraordinary measure designed to ensure that the airlines did not charge exorbitant prices in a situation of limited availability.
At a press conference in New Delhi on December 29, 2020, Puri had said that fare capping had benefited both the passengers and airlines.
IndiGo and SpiceJet planes. Image courtesy: Wikimedia Commons/Andrew Thomas
The fare capping was to be in force till March 31, 2021. Puri had informed Parliament that further opening up of the domestic sector and relaxations in fare capping would be subject to the prevailing Covid-19 situation, the status of operations and passenger demand.
Weaker airlines like SpiceJet and Go First had complained that running flights at much lower than full capacity and rising fuel costs have severely threatened viability. Stronger peer IndiGo and the Tata-owned Vistara have opposed the government's direct intervention.
India had deregulated the aviation industry in 1994, allowing market forces to determine airfares. However, a clause in the Aircraft Act, 1934 allows the government to frame any rules, including those regulating tariffs, a Business Standard report pointed out.
With the country moving past the second Covid wave, the MoCA may have a chance to open the aviation industry to free market again. How soon the new team at the MoCA does it would be interesting to see.
3. Air India and Pawan Hans sale
The MoCA under Puri had pushed the gas pedal on the privatisation of Air India, offering to offload the government's entire stake in the national carrier, its low-cost subsidiary Air India Express and a 50% stake in ground handling unit AISATS in January last year.
This was the third time that Air India was up for disinvestment, but this time, the deal terms were much sweeter. Puri said on more than one occasion that considering the financial mess that Air India was in, the choice before the government was to either privatise it or close it down.
Closing down Air India would severely affect Indian aviation's international footprint and rob the country of a national carrier that has had a glowing record of rescuing people in need several times. However, the Air India privatisation process has already seen several postponements. The date for submitting Expressions of Interest (EoIs) was repeatedly pushed back owing to the operational and financial difficulties for the aviation industry across the world in the wake of the pandemic.
An Air India B787-8 Dreamliner. Image courtesy: Facebook/Air India
The government, wary of the fact that two previous attempts of disinvestment in Air India had failed to take off, continued to sweeten the deal terms, and in December last year, revealed that the Air India privatisation bid had received multiple expressions of interest. However, the shortlisting of potential bidders continued to be postponed too, and the crippling second Covid wave that hit India threatened to put the Air India sale off track. According to a media report, the Tata Group and budget carrier SpiceJet's promoter Ajay Singh have been shortlisted as prospective buyers of the national carrier.
According to Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey, the government had earlier targeted to complete the disinvestment by the first half of FY22 (April-September), but now "there could be a little bit of slippage in terms of time", Live Mint reported.
Despite the considerable easing of the deal conditions, under the current situation, the shortlisted bidders may still find it difficult to go ahead with the bid.
Air India Chairman and Managing Director (CMD) Rajiv Bansal had said that the airline's losses could be around Rs 8,000 crore in FY21. Its cash losses were expected to rise 80% on year to Rs 6,000 crore in FY21.
Apart from financial troubles, Air India has also been marred by allegations of mismanagement, industrial disputes and even safety lapses. Evidently, there would be a lot of the new minister's plate as far as managing the national carrier is concerned.
The government has received "multiple expressions of interest" also for the premier helicopter services company Pawan Hans Limited, DIPAM Secretary Tuhin Kanta Pandey said in February 2021.
Miniratna helicopter company Pawan Hans is also up for sale. Image courtesy: Twitter/@PawanHansLtd
On December 8 last year, the government had ‘in-principle’ decided to disinvest its entire equity shareholding in Pawan Hans by way of strategic disinvestment along with transfer of management control.
The government owns 51% of the stake in the company, while the Oil and Natural Gas Corporation (ONGC) holds the remaining 49%.
The ONGC had also decided to offload its entire stake to the successful bidder at the same discovered price per share and on the same terms and conditions as agreed by the government, except for the rights available exclusively to the government.
4. Expanding VBM to South and Central America
The Vande Bharat Mission (VBM), launched in May last year, has been the biggest repatriation exercise undertaken by the Indian government ever. According to data provided by the Ministry of Civil Aviation (MoCA), till April 30, as many as 61,10,130 people had arrived under the mission through various channels -- air, land and sea. Till July 8, 2021, the Air India group had operated 28,244 flights, carrying 36,54,206 passengers.
Regions like South Asia, South East Asia, East Asia, Central Asia, Middle East, Africa, Western Europe, Eastern Europe, Caucasus, Oceania, Scandinavia and North America have been touched by the VBM.
Passengers returning on VBM flights. Image courtesy: Twitter/@HardeepSPuri
However, two areas of the world that have not been connected by Indian VBM flights in any big way are South America and Central America. The best option for Indians stranded in these regions is to first take flights to the US or Europe and from there, come back to India. India doesn't have an air bubble agreement with a South or Central American country either. The new MoCA leadership would do well to address this to make the VBM a global exercise in the truest sense.
5. Aviation staff as frontline workers
The apparent unwillingness of the Indian government to include aviation staff under the definition of frontline workers for the purpose of priority Covid vaccination has created a lot of bad blood.
Right after the Covid vaccination drive was set in motion in India in January this year, the then Civil Aviation Secretary Pradeep Singh Kharola wrote to his counterpart in the Ministry of Health and Family Welfare (MoHFW) Rajesh Bhushan that airlines and airports had approached the MoCA with the plea that they should be vaccinated on a priority basis after the healthcare workers.
"Considering that the frontline workers of airlines and airports are also involved in the movement of vaccines, this MoCA recognises the merit in the proposal and requests the MoHFW to include frontline workers of airlines and airports along with frontline workers mentioned in the operational guidelines released on December 28, 2020," Kharola said.
An Air India plane carries Covaxin boxes to Kolkata. Image courtesy: Twitter/@aaikolairport
"You will agree with me that the crew, engineers, technicians, ground staff, frontline workers in aviation have certain risk elements while performing their duties most diligently and make air transportation a safe mode of transport," Kharola added, according to a PTI report.
Civil Aviation Secretary TK Pandey had written to the state governments on April 27 to consider personnel involved in aviation and related services for vaccination on priority.
The MoCA had issued guidelines on May 6 for the inoculation of all stakeholders, while suggesting that priority be given to Air Traffic Control Officers (ATCOs), pilots and cabin crew of airlines and mission-critical and passenger-facing staff.
However, the MoCA has not been able to convince the MoHFW and the state governments about the need to include aviation staff as priority sector employees.
With the states taking time to react, the airlines started to formulate plans themselves and contact hospitals for inoculating their staff against the coronavirus.
The Air India unions Indian Pilots' Guild (IPG), Indian Commercial Pilots' Association (ICPA) and Air India Cabin Crew Association (AICCA) took up the issue in a big way.
The IPG -- an Air India union of pilots flying widebody planes -- was the first to take the initiative in April to ensure vaccination for aircrew.
The IPG raised concerns over the lack of vaccination for the aircrew through its representation to the Union Health Minister Harsh Vardhan on April 16 and to the Air India CMD Rajiv Bansal on April 28.
In those two representations, the IPG raised some very important points. Among other things, it pointed out that competitor airlines in the Gulf (Emirates and Etihad) had started to vaccinate their staff as early as December 2020 and boast of having "fully vaccinated frontline teams across all touchpoints" since February 2021. In the same month, another global giant Singapore Airlines commenced international flights with a fully vaccinated aircrew. The IPG added that vaccinated aircrew would stand as natural barriers against new strains of the virus.
On April 30, Air India Director (Operations) Captain RS Sandhu assured the Air India staff of launching a vaccination drive. The ICPA -- An Air India union of pilots flying narrowbody planes -- decided to push the envelope and threatened to stop work if vaccines are not arranged in a letter on May 4.
Other major airlines in India -- IndiGo, SpiceJet, Vistara, Go First and AirAsia India -- also started vaccination drives for their employees. Airports in India did likewise.
Nearly 2,000 Air India employees were infected by Covid, 583 were hospitalised and 19 groundstaff were dead, according to figures provided by Puri in Parliament on February 11. After the national carrier lost five pilots in May 2021, there was a unanimous opinion that the pilots could have been saved had they received their vaccinations on time.
The Federation of Indian Pilots (FIP), the largest pan-Indian body of commercial pilots flying with both scheduled and non-scheduled airlines, filed a public interest litigation (PIL) in the Bombay High Court, seeking, among other things, directives to the government for creating a separate category of Covid first responders called 'air transportation' workers for priority vaccinations.
6. Airport privatisation
The then Civil Aviation Secretary Pradeep Singh Kharola had said on February 4 that the government would soon start the next phase of airport privatisation, with the possibility of six to ten airports being taken up. The third phase of airport privatisation was planned to commence from April this year, with the government looking to club a non-profitable airport with a profitable one and offer them as a package.
Union Finance Minister Nirmala Sitharaman had said in her Budget speech on February 1 that the government this year would be privatising airports run by the AAI from Tier 2 and Tier 3 cities.
The Guwahati airport has been awarded to the Adani group. Image courtesy: Wikimedia Commons/SlowPhoton
However, the Adani group, which has emerged as the biggest player in the airports business in India, has deferred the takeover of three airports -- Jaipur, Guwahati and Trivandrum -- till December as a result of the disruptions created by the Covid surge, Business Standard reported. Further privatisation of airports is in the offing, but reduced traffic in the wake of the second Covid wave could scare away more players, according to a Moneycontrol article.
7. Restarting regular international flights
India has continued to extend the ban on scheduled commercial international passenger flights on an incremental basis. Regular international passenger flights have remained suspended in India since March 23, 2020, in order to curb the spread of the pandemic. The latest circular on June 30, extended the ban till July 31, 2021.
Puri had said last year that India's decision to resume scheduled commercial international air travel depended on other countries' readiness to accept flights. With flights from India being prohibited by many countries, the resumption of regular international passenger air travel by India seems to be in jeopardy. The emergence of mutant strains of the coronavirus in numerous countries had given the Indian authorities little confidence to restart regular international air travel.
8. Convincing countries to accept flyers from India
The alarming Covid scenario in India in April-May when the country was reporting three to four lakh daily new cases caused many countries to suspend flights from India. The fear of the Delta variant of the coronavirus that had first appeared in India had made many countries unwilling to accept flights from India. While Germany, Canada and Maldives have lifted the entry ban on flyers from India, the UK continues to keep India on its 'red list'. Key Middle East countries like the UAE and Oman have also been extremely wary of opening up their airports to flights from India.
An Air India Dreamliner at the London Heathrow airport. Image courtesy: Wikimedia Commons/John Taggart
Convincing some of these countries to allow flyers from India soon, especially as the Covid situation has markedly improved in India, is a big challenge for Scindia and his team. India also has to contend with the fact that India's homemade Covaxin is recognised by only a handful of countries. Covishield, the other vaccine being used in India, is not recognised by a number of countries too.
Unless India is able to convince the World Health Organisation (WHO) and countries around the world about the efficacy of the Indian vaccines, or India okays another global vaccine, vaccine passports and travel passes for international travel may not be a feasible idea for India.
9. Gaps in UDAN
While the Regional Connectivity Scheme - Ude Desh ka Aam Naagrik (RCS-UDAN) has had its success in connecting Tier 2 and Tier 3 cities and allowed smaller players like Flybig, Air Taxi and Star Air to thrive, there have been glaring shortcomings too.
The first Flybig flight that used a plane wet-leased from SpiceJet. Image courtesy: Twitter/@flybigairlines
Even after multiple rounds of bidding, operational routes remain under 50% of what was bid out, a Moneycontrol article said. Airlines like Air Deccan and Air Odisha have failed and SpiceJet has cancelled many routes. The dream of building 100 new airports, including heliports and seaports, has also seemingly run into rough weather.
10. Airport infrastructure
The airport infrastructure was being utilised at its peak before the pandemic, according to a Moneycontrol article. The Mumbai airport has run out of capacity and the case is no different in the other major airports of the country. The Delhi airport is set to exhaust its annual carrying capacity of 100 million passengers by 2023-24. Lack of space to expand civil enclaves in defence airports has meant that airports at Pune, Goa, Vizag, Port Blair, Jammu and others can't grow beyond a point.
11. ATF issues
The demand to move Aviation Turbine Fuel (ATF) under the Goods and Services Tax (GST) regime has been a long-standing one, the Moneycontrol article pointed out. Even before GST came into being, there were calls for having a flat rate of taxation across the country. Nothing has happened on these fronts and rising fuel prices are putting a lot of pressure on airlines, especially the weaker ones, already bruised by the pandemic.
12. Air safety
An article in Plane Vanilla had pointed out that during April-December 2020, there were one air accident and 360 air safety incidents. This represented a surge of almost 150% in the number of incidents as compared to the previous year. There was on average, 40 incidents per month in 2020, despite flight departures falling by 67% in the wake of the pandemic.
The then Civil Aviation Minister Hardeep Singh Puri inspects the devastation caused by the Kozhikode crash. Image courtesy: Twitter/@HardeepSPuri
The report on the Kozhikode crash in August 2020, which saw an Air India Express flight overshoot the tabletop runway at the Calicut airport amid inclement weather and fall into a gorge, killing around 20 people, is still awaited. An audit report from the International Civil Aviation Organisation (ICAO) and the US Federal Aviation Administration (FAA) may also arrive. An adverse report could affect Indian carriers' ability to add new routes to the US.