Regulations
Draft Civil Aviation Policy leaves air travellers high and dry!
The Draft Policy does not even remotely indicate anything to make air travel stress-free, trouble-free, convenient and comfortable for passengers. There is no proposal for any grievance redressal system either
 
The Ministry of Civil Aviation (MCA) has released a draft National Civil Aviation Policy 2015 suggesting a series of steps to take flying to the masses. The policy inter-alia has proposed viability gap funding for regional routes, liberal bilateral traffic rights, self-handling airport operations and retaining the route dispersal guidelines. 
 
According to the Policy, the vision is to create an eco-system to enable 30 crore domestic tickets by 2022 and 50 crore by 2027. Similarly, international ticketing is likely to increase to 20 crore by 2027. Besides, the mission of the Policy is to provide safe, secure, affordable and sustainable air travel with access to various parts of India and the world. 
 
But the whole Policy is silent about the need to create an environment conducive for convenience and satisfaction of air travellers who have a vital role in making the lofty vision and the mission successful. With steep growth in air traffic and spreading air travel to the hinterland, number of flyers are bound to increase manifold. However, the Policy does not even remotely indicate the steps proposed to make air travel stress free, trouble free, convenient and comfortable for passengers, who suffer at the hands of airlines that treat economy class passengers like cattle. If celebrities like Sachin Tendulkar had to face the indifference and ignominy at the hands of a reputed foreign airline recently, one can imagine the fate of lesser mortals who are always at the receiving end when the aircraft movements get disrupted due to a variety of reasons. 
 
Safety of air travellers:
 
The Policy makes a very general statement with regard to aviation safety. It no doubt says that the focus will be on pre-empting and preventing incidents and safety violations will be treated with zero-tolerance. Apart from saying that the Director General of Civil Aviation (DGCA) will be authorised to impose fines and penalties depending upon the nature of violations, the Policy is silent as to how passengers will be protected in the case of incidents and accidents. Though prevention of accidents is better than cure, it is a fact that unless and until obligations of airlines are unambiguously spelt out, there is always a temptation to short change passengers. This will ensure that travellers are compensated promptly and fairly without having to fight for their rights.
 
Need for a grievance redressal mechanism for air travellers: 
 
Grievances of air travellers are not being given the attention it deserves, and there is total callousness, especially in attending to grievances of passengers. This is evident from the harassment meted out to the passengers whenever the flights are delayed or cancelled.  There are guidelines issued by the DGCA on facilities to be provided to passengers by airlines due to denied boarding, cancellation of flights and delays in flights. However, general experience of air travellers is that they are observed more in breach than in compliance.
 
Surprisingly, there is no regulatory mechanism in the airline industry for travellers to get grievance redressed when there is no response to customer complaints. The present guidelines say that if the airlines fail to fulfil their obligations, passengers may complain to the statutory bodies set up under the relevant applicable laws. This means the aggrieved passenger is required to knock doors of consumer forums or civil courts to get justice. This is not only cumbersome but time consuming and most of the time result in forcing the consumer to suffer in silence. 
 
Set up an Independent Ombudsman for the airline industry:
 
What is, therefore, required is a regulatory mechanism to attend to grievances of air passengers to provide justice quickly and easily. Banking industry follow a grievance redressal machinery like Banking Ombudsman Scheme. The government should, therefore, set up an institution of independent Civil Aviation Ombudsman with offices in all metros to provide easy, trouble free and cost effective grievance redressal mechanism.  
 
The setting up of office of Ombudsman for the airline industry should be supplemented by appropriate guidelines for the airlines to provide instant compensation to travellers without their asking for any deficiency in service delivery on the lines what is done by the Telecom Regulatory Authority in the case of call drops for mobile telecom users. 
 
This will certainly provide the necessary thrust to the growth of airline industry and make the vision and the mission outlined in the draft National Civil Aviation Policy 2015 a success. 
 
 (The author is a financial analyst, writing for Moneylife under the pen-name ‘Gurpur’.)

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COMMENTS

Narendra Doshi

1 year ago

Public is one of the important stake holder in this and as rightly highlighted must be given due consideration.

Maruti Suzuki: An open letter to the shareholders from IiAS

IiAS, a proxy advisory service says that if the Gujarat plant transfer to Suzuki is approved, Maruti will lose all control over its own destiny, and its shareholders will always remain subservient to the interest of parent Suzuki’s shareholders

 

Proxy advisory firm Institutional Investor Advisory Services India Ltd (IiAS) has asked shareholders of Maruti Suzuki India Ltd to vote against a proposal to allow the company’s parent Suzuki Motor Corp of Japan to own its upcoming plant in Gujarat. 

 
“Allowing Suzuki to own the Gujarat plant and its manufacturing has implications that extend beyond commercial arrangements. Suzuki is currently dependent on Maruti, but allowing Suzuki to own the Gujarat plant will shift the balance of power in favour of Suzuki. If the transaction is approved, Maruti will lose all control over its own destiny, and Maruti’s shareholders will always remain subservient to the interest of Suzuki’s shareholders. Equally important are the implications of such transactions on other family-run and MNCs in India – they too may begin manufacturing in unlisted companies and allow the listed company to merely trade,” IiAS said in the open letter.
 
Last year, Bengaluru-based InGovern Research Services also had advised shareholders of Maruti Suzuki, to vote against the country’s largest carmaker's proposal to enter into contractual arrangements for expansion with a 100% subsidiary of Suzuki, the dominant shareholder in the company.
 
Here is the open letter from IiAS to shareholders of Maruti Suzuki…
 
Dear Shareholder:
For a company with as strong a manufacturing track record as Maruti has, to willingly cede ground to another manufacturer should be anathema - yet this is just what your company is proposing, by allowing Suzuki to own the Gujarat plant. Make no mistake, this vote is about the shifting power equation and whether shareholders will allow a manufacturer to continue to ‘manufacture and sell’ or let it shift gears, and ‘buy to sell.’ To put it simply, you - the shareholders of Maruti - need to decide whether Maruti will continue to remain a manufacturer of cars or will it become a glorified distributor.
 
Equally important are the implications of this vote on family run firms and on other MNC’s. If shareholders agree to Suzuki doing owning the Gujarat plant, why should they not agree to the Tata’s, Munjal’s, Mahindra’s or the Bajaj families proposing the same?  Will Glaxo or Nestlé or Holcim now set up fully owned subsidiaries and have their Indian arm only market the products? If so, it will spell doom for the Indian equity markets.
 
About Maruti and this vote
Your company, Maruti currently has two facilities - in Gurgaon and in Manesar, which have a combined capacity to manufacture 1.55 million cars. Your company planned to expand its capacities by setting up a third plant in Gujarat (1,500,000 cars annually – to be set up in a phased manner). 
 
However, in early 2014, Maruti took us all by surprise when it announced that, Suzuki (and not Maruti) will set up and own the Gujarat plant. Suzuki will manufacture the cars in Gujarat that will be purchased by Maruti at cost and be sold under the Maruti product portfolio.  
 
In order to execute this arrangement, your company now proposes to enter into two related party transaction contracts with Suzuki Motor Gujarat Pvt Ltd (SMGPL), a wholly-owned subsidiary of Suzuki Motor Corp (Suzuki), and as required by the Companies Act, 2013, is seeking your approval for the following  transactions:
 
I. Contract Manufacturing Agreement for manufacture and supply of vehicles for an initial period of 15 years. All goods will be sold at cost by SMGPL to Maruti with no profit or loss for SMGPL.
II. Lease Deed for developing the plant on land owned by Maruti. As per the deed, SMGPL will pay Maruti an annual aggregate rental of Rs49.9 million for the land an initial period of 15 years. 
 
IiAS recommends that you vote AGAINST the resolution. Voting AGAINST this resolution means that Maruti will own the Gujarat plant and not Suzuki – it will not result in any stoppage of capacity creation at the Gujarat plant.
 
IiAS has had reservations about this deal since it was first announced in January 2014 and continues to believe that the deal is not in Maruti’s long-term interest. Our main contentions are in our open letter below to shareholders.  
 

 

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COMMENTS

GANESHKUMAR AP

1 year ago

Benefits of scale, margins will be lost by the Maruti.

Narendra Doshi

1 year ago

Can you also say the other side of the coin story to evaluate your proposal, properly.

Unending tests of Maggi cannot go on: Apex consumer court
The apex consumer court on Tuesday said "unending testing of Maggi samples cannot go on", following the Rs.640-crore class action suit filed by the government against Nestle India.
 
A bench of the National Consumer Disputes Redressal Commission (NCDRC), comprising Justice V.K. Jain and Justice B.C. Gupta, reserved its order on the decision on the tests.
 
The bench said it would decide later on the fresh tests on 31 samples of Maggi noodles, as requested by the government counsel on Monday.
 
Although the bench agreed in principle to have tested the 31 samples, identified by the government counsel, it reserved the order and said the decision would be made later.
 
The court would also decide in future regarding where the 31 samples would be tested, if at all fresh tests are called for.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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