India’s Aviation Crisis

April 23, 2011 April 23, 2011

Promises last year to add over 500 regulatory positions have not yet been implemented, risking India being degraded by the FAA to a Category 2 country which cannot fly to the US.

Only halfway through an inquiry of their aviation industry, India is suffering an ethical crisis in aviation, following the revelation of mass corruption and fraud. India has 8000 pilots. So far 29 pilots have lost their licenses. (This is not including 57 drunk pilots who reported for work inebriated.)

Bribery, test cheating, fake flying records led to the revoking of licensure and firing of at least twelve pilots. In order to pass off some of the false information, those complicit had to have included aerodrome officials, aviation fuel suppliers, flying instructors and government officials. Some flying schools seem to be completely uncredited. Two gangs from six cities were running a racket fudging test scores. Revoked licenses include six commanders licenses and 13 commercial pilots licenses. The problem is industry wide, with a vastly understaffed (140 employees) regulatory system. Licensure testing is not computerized, and not focused on aviation.

So in view of all of this exposure, I think back on 2007. I am not an attorney, and this is just my opinion, but it is the opinion of someone who is reasonably familiar with what goes on in the aviation industry.

I see so much of what is happening, from my vantage point, just standing back and looking inside what is going on.

I can not help but wonder how these airlines continue to get their financing.

Why aren’t the financiers taking a harder look at who they’re giving the keys to the planes? Let’s consider how quickly Air Inda Express grew. Sure, they are owned by Air India, but they started out with five planes and very quickly grew to a fleet of 25. Someone financed these planes.

Why?

What were they thinking?

After an audit of Indian Aviation in 2007 revealed unqualified manpower, then we saw the Air India Express crash in 2010. Now they have another audit and we find that NOTHING HAS CHANGED.

Think about this in ordinary terms. If you as a driver were to lease a car, when
you walk into that agency to get the lease, they check to make sure you have a valid license. They make sure you’re old enough. They verify your qualifications as a driver. They examine your fiscal health before they accept your contract and hand over the keys.

SImilarly, those companies which provide the loans for airlines to purchase planes do their due diligence. If an airline defaults on a loan, that A380 or B737-800 is going to get repossessed just as a car would be repossessed in similar circumstances.

In light of all of the corruption and lack of qualification that has been uncovered in all corners of Indian aviation, I can not help but wonder who performed the due diligence on these plane leases. Someone is financing it. It takes a lot of cash to put planes in the air, but that big financing brings in big income for leasing companies, in interest and lease payments.

So, the 2007 audit revealed failings in Indian aviation; and this one that is ongoing in 2011 has revealed the continuation of failings. Where are the leasing companies? Shouldn’t they monitor the safey program of their investments? If they do not do so, are they not negligent?

Are they not entrusting the guardianship of the lives of passengers, and those planes—weapons of mass destruction—to the hands of unqualified pilots?

In the Air India Express case, there was a 737 800 leased. We don’t have an official report yet, but there have been some who have precipitously assumed the crash was caused by pilot error. Everyone is concluding the pilot blundered. We do not know if (in addition to bundering) he was unqualfiied, asleep, stupid, suicidal, or if the plane malfunctioned. And we may never know.

But we do know a finance company backed that airline, who put a possibly unqualified pilot into that cockpit. Somebody financed that plane with due diligence that ignored the safety audits revealing the lack of health in Indian Aviation.

Are they not negligently entrusting weapons of mass destruction to unqualified personnel? The financiers have the right to repossess the plane if there is a failing in the plane, its operation or its custodianship. The financiers can withhold the use of a plane until such time that safety conditions are met and they abide by all international expectations, rules and recommendations of air authorities, just as ALL airlines must. If they do not have that right written into their contracts, shame on them, and to lessen that shame, write that condition, right and responsibility on all future contracts.

The lenders have the right to repossess the plane (and if they don’t they should.) They have the responsibility to do so, especially when life is on the line.

In the meantime, banks and leasing company should suffer the consequences of their negligence right along with the operators after a crash. In other words, pay for your mistake. Pay the families of the victims for negligently entrusting that weapon of mass destruction.