The downgrade means that domestic airlines like Jet Airways and Air India, which have 28 flights to the US per week, will not be allowed to add new flights or enter into code-share agreements with US carriers. Air India flies three daily flights to New York and Chicago while Jet Airways operates a single flight to New York daily. Air India, which is looking to join Star Alliance this summer, could also lose out on code sharing opportunities with commercial US airlines. Moreover, the current fleet could also face additional checks at US airports. However, to expand operations in the US, domestic carriers could opt to wet lease an aircraft from a Category 1 country.
Experts say the downgrade could also encourage other regulatory bodies to follow suit. The downgrade could also adversely affect IndiGo and Tata-SIA, which plan to expand in the North American market.
FAAs downgrade typically has a domino effect. Safety regulators in the European Union (EASA), Singapore (CAAS), Japan (CAB) and UAE (GCAA) may follow suit soon,
said Amber Dubey, partner and head, aerospace
and defence, at global consultancy KPMG.
This puts paid to Air Indias likely membership of the Star Alliance. Jets plans to go global through the Abu Dhabi hub may suffer too. IndiGo and SpiceJet may not be able to expand services globally. Start-up airlines like Tata-SIA and AirAsia would not be able to fly international even if the 5/20 Rule is abolished, Dubey added.
Union civil aviation minister Ajit Singh said that he was disappointed with FAA's decision, though he expressed hope that the matter would be resolved soon. This is very disappointing and surprising. The report has not taken into account the progress made since December. We are hopeful that when we complete the training of the inspection officers by March, the FAA will review this. DGCA will be in touch with them on every step and discuss technical issues continuously. He added, As soon as it is established that we have met all the requirements, India can regain its position. In retrospect, obviously if we had acted sooner, the issue could have been resolved.
An extract of the FAA communication provided by the civil aviation ministry said, The FAA has determined that India at this time is not in compliance with the international standards for aviation safety oversight of the Chicago convention and its annexes. The FAA is required to rate India as a Category 2 country, under its IASA programme. The FAA hopes to maintain an open dialogue with DGCA as you work through the process of re-establishing an ICAO compliant safety oversight system.
The move, which puts India in the same category as Indonesia, Zimbabwe and Paraguay, comes after the FAA safety audit team in a visit in September last year raised 31 issues with DGCA's oversight mechanism. Of this, 24 issues had been addressed and seven were unresolved by the time a second FAA delegation paid a visit in December.
As of January, two of the 31 issues were still remaining. The first pertains to the appointment of new flight operations inspectors, for which the Cabinet approved the creation of 75 posts on January 29 with pay equal to industry standards. The second issue pertains to training of an adequate number of airworthiness officers for new aircraft.
We were surprised because all except two of the remaining seven issues have been resolved. They should have given their judgement only after taking into account our recent moves. According to them, we have completed 75% of the requirements. In my view, we are at 95% today, Singh said.
Singh added that India sees no reason for any retaliation or for taking up the matter through bilateral channels.
I don't think there is any reason to even think of a retaliation, I don't see any impact on (Air India's) Boeing 787 orders. CMD Air India has also been briefed on the issue, I don't think there will be an impact on their integration with the Star Alliance, he said.
The move can be seen as a step back and will be demoralising for India's aviation sector, which is spending billions of dollars on upgrading its infrastructure and has recently permitted foreign airlines to invest up to 49% in a domestic carrier.
The government is also working on getting a new Civil Aviation Authority Bill passed in Parliament that will set up a new regulator with far more autonomy.