Does India need another aviation regulator?

Jul 16 2013, 01:04 IST
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SummaryThe govt plans to replace DGCA by the Civil Aviation Authority, adding to the list of AAI and AERA. While booming air traffic necessitates strengthening regulators, it needs to be seen whether multiple bodies add to the confusion or not

Why has the government mooted another regulator?

At present, India has two regulators: one, the Airport Authority of India (AAI) that oversees building of new airports and managing of existing ones, and two, the Airport Economic Regulatory Authority of India (AERA) that fixes tariff and administers private companies managing airports. In addition, the Directorate General of Civil Aviation (DGCA), a division under civil aviation ministry, oversees safety and navigation operations of airlines.

The Cabinet recently approved a Bill to replace the DGCA with an independent Civil Aviation Authority (CAA) considering the evolving scenario in the aviation industry. The Bill will be introduced in the forthcoming monsoon session of Parliament. This is necessary given the double-digit growth in Indian aviation industry, especially air traffic.

In the coming years, the DGCA will struggle to actively monitor the airline sector given the growth in air traffic. According to the government data, the total number of Indian passengers carried by both domestic and international carriers increased from 13.8 million in 2000-01 to 91.8 million at the end of 2010-11, a compounded annual growth rate of 10.1%. Given the pace of increase, the civil aviation ministry estimates passenger traffic to rise to 171.8 million by end of 12th Plan (2016-17) and further rise to 696.4 million by end of 15th Plan (2031-32). The growth in domestic passengers is estimated to rise at a CAGR of 10.6% from 102.4 million at the end of 2016-17 to 447.7 million by 2031-32, while international passengers will rise by 9.3% CAGR from 69.4 million to 248.8 million.

What is the global practice?

The United Nations International Civil Aviation Organisation envisages a separate regulator for overseeing aviation safety and navigational operations. Accordingly, developed nations have separate regulators for the sector—the US has the Federal Aviation Administration while the UK has the Civil Aviation Authority.

What powers will the proposed regulator CAA get?

The CAA will be responsible for ensuring civil aviation safety and regulate navigation operators and operators of other civil aviation facilities like chartered planes and helicopter services. The body will look into issues of financial conditions of airliners. The CAA will also look into matters pertaining to consumer protection and environment regulations in the civil aviation sector.

Why replace the existing DGCA with the CAA?

Though the DGCA has powers to grant or cancel licences of airlines, it has limited staff and resources to meet the evolving regulatory requirements of a growing airline industry. For instance, the

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