Civil Aviation Authority

On August 19, 1934, the Aircraft Act, 1934, received the Governor General’s assent and for eight decades, has guided Indian civil aviation. As with any octogenarian, it is respected more for its age than for its relevance and, as an edifice, it stands on a shaky and anachronistic foundation. Whereas other sectors such as banking and insurance have a provision of an Ombudsman, this Act has no such stipulation. There have been desultory attempts in the past to replace the Act with one that relates more intimately with the changes in civil aviation since its legislation, but for the time being, it plods on.

For more pertinent regulations, the Ministry of Civil Aviation (MoCA) uses an attached office - that of the Directorate General of Civil Aviation (DGCA) which is the regulatory body in the field of civil aviation primarily dealing with safety issues, regulation of air transport services and airworthiness standards. However, in recent months, the relevance of the DGCA itself has come under a cloud with the US Federal Aviation Administration (FAA) downgrading its safety rating to Category II during an audit in September 2013. One consequence of this downgrade has been financial implications for airlines flying internationally and another, the sheer ignominy of being heaped with the insult of the lower categorisation. A fallout has been the re-raising of the question of replacing DGCA with an empowered, more efficient and more autonomous body with the task of regulating and managing the nation’s civil aviation more efficaciously and safely.

DGCA FRAILTIES

For various reasons, the DGCA has not managed to command respect among the stakeholders whose affairs it regulates. This is despite the fact that it has on its strength, wellintentioned officials. These officers individually aver their commitment not just to regulating, but also facilitating civil aviation operations in the country. In its main task of regulating safety and efficiency of operations through audits and surveillance, the DGCA does not seem to have done too well, often coming under attack at home but more importantly, being indicted by the International Civil Aviation Organisation (ICAO) and FAA audits in the past.

Moreover, the DGCA has off and on tried to regulate airline activities not strictly under its mandate. For example, on several occasions it has tried to scuttle what it perceived as cartelisation by airlines. The airlines, of course, cried foul and pointed out that their commercial activities were beyond the scope of DGCA’s regulatory envelope.

Manpower shortage has been a perennial problem for the DGCA and, in the absence of adequate inspectors, pilots and ground personnel for full coverage of all operations, sufficient diligence has not been possible. This was the major reason for the downgrade by the FAA which, alas, has not fully served the purpose of jolting the DGCA into filling all established posts and creating new ones to meet the growing civil aviation requirements. This is the result of a largely archaic recruitment procedure.

Yet another problem has been the absence of financial powers to not only meet its manpower requirements but to also cope with the dynamics of a vibrant sector with immense growth potential. If experts are to be heeded, India is poised to be the third largest civil aviation market by 2031, with its airliner strength growing from its present numbers of around 400 to about 2,000 by then.

CAA AS A PART OF NEW POLICY

The United Progressive Alliance (UPA) Government had indeed initiated the Civil Aviation Authority (CAA) Bill as a part of its endeavour to introduce major reforms in the civil aviation sector, but could not bring it to the enactment stage for various reasons. The CAA Bill was introduced in 2013 during the monsoon session of the Parliament and provided for a new CAA to don the mantle that the DGCA currently does albeit with some changes. In addition to what the DGCA does now, the CAA would be given financial powers and autonomy in operations so as to enable it to take a wider range of decisions along with broader investigative responsibility. It would have the power to issue directives, the power of seizure and the power to punish any person, operator, company or a government department for failure to comply with its orders or directions.

The Act provides for CAA to be able to carry out its own recruitment of professionals, currently carried out by the Union Public Services Commission. This would redress one of the “severe deficiencies” pointed out by the ICAO and FAA. Around 40 per cent of its posts are lying vacant and there are problems in creating posts and hiring of personnel. It will also have full autonomy to regulate all issues concerning consumer protection and environment regulations in the civil aviation sector.

The Act provides for an Authority which would have a Chairperson, a Director General and between seven and nine members including five full-time members. All members would be appointed by the government on the recommendation of a Selection Committee headed by the Cabinet Secretary. It would be empowered to levy fees and charges under the Aircraft Act of 1934 and would be self-financing. It would establish a separate fund called the Civil Aviation Authority of India Fund, which would get budgetary support and be used for all expenses of the Authority. The idea is to give the CAA full functional and financial autonomy so that it would be able to recruit its own staff, decide on its pay structure and have the powers to fix and collect fees for rendering services to the civil aviation industry stakeholders. It may also levy charges for safety oversight functions of the air navigation services, safety fee from the passengers for safety oversight functions and safety fee for surveillance inspection of air transport operators with prior permission of the government. It is proposed to create this fund by collecting fees from air navigation service providers and passengers in additional to the budgetary support given by the government.

CAA AND THE NEW DRAFT AVIATION POLICY

In the past, there have been murmurs about replacing the Aircraft Act of 1934 with a more robust and more relevant one. Kapil Kaul, CEO South Asia, of Centre for Asia Pacific Aviation (CAPA), says the new Act, “needs to be comprehensive and include safety, security, economic, environment, competition and other aspects of modern aviation. Recent amendments are not as detailed and comprehensive. It needs to take all aspects of modern aviation into consideration,” he says.

CAPA says that weakness of the institutional framework is one of the core underlying problems and it gets accentuated by a lack of a comprehensive Civil Aviation Policy. In July 2012, it was reported that the government intended to bring a new comprehensive law entitled “The New Civil Aviation Act, 2012” to replace the Aircraft Act, 1934 but that did not materialise. The new government has circulated a draft aviation policy which has been welcomed by some. However, experts feel that it is too general and only draws up an intent of what needs to be done and not how it is to be done. There is no mention of CAA or a replacement of the Aircraft Act of 1934 in the draft policy.

EXPECTATIONS OF THE CAA BILL

Peeyush Naidu, Director, Deloitte in India, opines that setting up of a CAA to replace the DGCA by enacting new legislation, would be a key milestone. The CAA Bill died a natural death with the dissolution of the Parliament in which it was introduced. There was some speculation that the Bill could be introduced in the budget session of the new government so as to ward off anticipated criticism by the next FAA audit wherein the government is making all efforts to get the Category II stigma removed.

The content is in public domain and has more or less remained constant since its inception during the UPA tenure. However, the expectations of different stakeholders are diverse. While the government would definitely want to have a generalist Indian Administrative Service (IAS) officer at the head of the new Authority, the industry, especially the airlines, would like to have at its head a professional aviation manager with hands-on experience and indepth knowledge of civil aviation.

Going by past experience, the industry will have to grin and bear an IAS head of the Authority. However, it can hope for a deviation from this norm given the fact that Prime Minister Narendra Modi has proved to be anything but a stereotype leader. Should an aviation professional be appointed as the head of the CAA, a real change could be expected in the domain of civil aviation. Otherwise, cynics already seeing the new CAA as ‘old wine in a new bottle’ would be proved right.

CONCLUSION

The passage of the CAA Bill is eagerly awaited by the Indian civil aviation industry and there is optimism in some quarters about changes predicated to the appointment of a new CAA with an empowered and emboldened organisation to do his bidding in pursuit of the civil aviation industry’s growth potential. However, there is also the lurking fear among many stakeholders that a more robust regulatory organisation, with absolute or near absolute authority over operators, may add to the existing woes and complaints of the operators, negating the very sentiment behind the change from a DGCA to a CAA. The industry in general is dissatisfied with the DGCA’s functioning and it would be tragic if the new CAA turns out to be a bigger impediment than the DGCA.