Citizens' Issues
The pigsty that is civil aviation in India (Part III)

Over 90% of Indian domestic air passenger travel is supposed to be ‘business travel’, and is paid for by commercial entities. One would have thought that the largest protest would have come from them, since it is their human assets which are out there in the skies, being flown by fakes and frauds. However, they too have kept their silence... and the reasons are not too far to find

The complete business of buying, owning, operating and generally keeping in good order any private airplane is totally in the hands of the DGCA (Directorate General of Civil Aviation). One word or line out of place by any business leaders, and they would probably find that they have to take commercial flights, too. And that wouldn't really do, would it? I mean, can you imagine—not being permitted to take your private business plane on a holiday to watch the Indian Cricket Team defeat the Pakistani Cricket Team?

 Let’s get back to our series on civil aviation. There is somebody in the civil aviation part of governance in India who is very, very upset with the title as well as contents of the first two parts of this series (The pigsty that is civil aviation in India (Part I) and the second (The pigsty that is civil aviation in India (Part II) (

Apparently, the title and article are "against National Interest", and there is concern that the international community will laugh at us. Or worse. On the contents of the article itself, there is not much reflex, as yet. Whether the reality of aviation in India is not against national interest, known wide and far and currently the subject of immense interest on the Internet as well as with the international community, nothing.

Well, first things first—the reference to pigsty and all matters porky, including porcine fingers from the various parts of the Ministry of Civil Aviation, DGCA, et al, dipping into the fat and grabbing the grease, in a manner of speaking, were and are with reference to a book called Animal Farm. Penned not too long ago by a famous writer of Indian origin and Bengali birth, erstwhile from Motihari and Katihar, now in Bihar, called George Orwell. If they haven't read it, my sincere apologies, but I have always maintained that more of us should look towards Bihar for inspiration. Including of the National Interest sort, lately.

Next, as far as "National Interest" due to media reportage is concerned, spare me. There is no dearth of inside information many of us have on how anything even remotely resembling "National Interest" is more often than not the first victim to be spat out by the roadside the moment anything to do with civil aviation is taken up in India. Whether it is equity acquired free of cost by ministers who manage amazing links also with the people who operate accounts in tax havens, or whether it is plain and simple payoffs for everything down the line, the realities are known on the street.

You only have to try to fathom out the amazingly anti-people and probably anti-National terms and conditions of airport privatisation in India, for example, to see how the aviation scams when they finally surface will leave the Telecom and CWG/IOA scams way behind. Even John Company could not have got some of them past the natives with some of the conditions we find ourselves bound to lately.
But hey, National Interest, to be confused with personal benefit, means that deep resounding silences are preferred, with messages sent that anybody falling out of line shall be dealt with. Guess what, we only have National Interest in mind while writing, so, here we go.
To start with, barring the aviation authorities, what else can we deduce by way of the resounding silence from other entities involved in the aviation business in India? And what other solutions can we try to offer, as responsible citizens looking out for National interest? That is the question this third instalment hopes to answer.

Before that, an anecdote— it happened decades ago. I was in a shipping company's office when word came in that a ship had gone down, somewhere in the South China Sea, with all hands on board. This was in the days when dry cargo bulk carriers were sinking with regular frequency, and human error was the regular result of enquiries carried out by flag states—flag states being, largely, the so-called ‘Flag of Convenience’ countries. The usual SOP (Standard Operating Procedure) was to run around, ensure that all paperwork satisfying any seaworthiness requirements were updated before the inspectors landed up, and then to figure out how to maximise profits out of insurance as well as P&I Clubs. Simply put, human error was equal to all money recovered by the ship-owner, and some scanty compensation provided to relatives of the blamed and found guilty, already deceased.

Pretty much the same procedure is adopted with airline crash enquiries. It is never, or seldom, that the truth on manufacturing defects or maintenance or anything else comes out—except, lately, with some cases in developed countries. International TV crews cannot be everywhere—they weren't given access to the Mangalore crash, for example. Fake licence or not, will that information ever be re-verified? Has it ever been re-verified in the past? The answer is NO.
This placing all the blame on the humans on board went on, not surprisingly, until a British ship (the Derbyshire ) with British crew onboard went down. And the families, unions as well as other entities like educational and research organisations organised a very serious investigation. They paid for it, too, in millions of pounds. Which included—amongst other things—the hiring of deep sea submarines to go down to the bottom of the Pacific Ocean and take photographs as well as try to figure out what happened.

The rest is known history, and brought forward the first real change in attitudes by ship-owners and shipyards towards safety in design, especially in larger ships. There was no human error at sea in this case. The huge ship simply broke up in microseconds and went down due to greed and design defects. There was sheer criminal negligence ashore at every stage, though—which the underwater probes brought out.

Something like that is what happens in civil aviation, too, especially in ‘emerging’ Third World countries. Like ours.

If an aviation accident takes place, almost every time—and this is borne out by the few accident investigation reports openly available—the blame is in most cases assigned to human error. The drill down attitude at Animal Farm, therefore, is simple—the little piglets, or humans at the front end, are disposable anyways. So does it really matter if their licence is genuine or not, as long as the paper trail behind it works to satisfy the owners and the insurance companies, in case and when an incident does occur?

All they will do is to go and hang another piglet.

But now we come to the part where the piglets take the battle to the bigger pigsty, the ones where the other fatter pigs are sitting, licking their chops, and waiting for the fuss to die down. As said before, a couple of middle or junior level DGCA officials will get it in the neck, some junior pilots without proper connections will lose their livelihoods, and after a while things will go back to as they were before.

If we really want to understand why that happens and has happened for centuries, then we have to take time out to read Emily Eden's bitingly incisive letters and reports on her visit to India. Before 1857. The fundamentals, however, of how things work in India remain the same. All that has changed is that the names of the players, be they the foreigners and their East India companies trying to rule us, or our own Maharajahs and their Munims bowing backwards to do their bidding, remain the same.

So, some basic fixes expected by consumers and customers from the real players, are proposed. All in the National Interest, of course?

1) Airlines will simply need to dig and drill down deeper into the licences held by pilots, especially those who have not come through regular channels like the Government run-training colleges, the Indian Air Force, their own cadet programmes or with otherwise impeccable backgrounds. Pilots who have come through the route of nepotism will have especially to be checked.

Which training college is genuine and which is fake is well known in the industry, and this information simply needs to be put to use. The simulators as well as internal checks and balances need to be in position. And any small security or detective agency will run a fairly comprehensive background check for a few thousand rupees.

In addition, airlines need to evolve their own cockpit crew matrix, like is done on ships as well as some of the better airlines. In brief, a new pilot must have an experienced co-pilot or another senior experienced pilot in the cockpit. Likewise, new co-pilots must work only under experienced pilots. The total number of actual flying hours on type should not be less than a certain number for both pilots in the cockpit, and this should be published data. Anything less than that "matrix", the total hours of experience inside a cockpit for both the pilots in the front seats, and the aircraft needs to be declared non-airworthy for scheduled passenger operations till rectified. A good number for this matrix, based on inputs from pilots, would be a minimum combined total of 4,000 hours "on type".

No point telling us customers about the food on board or something equally inane. We already know that co-pilots are hired basis on some amazing advance deposit to the airline process, and that promotions are done basis on external influences. Just let us know what the minimum hours in your cockpits will be when we fly.

2) Expecting the mainstream media to play honest intermediary is difficult—airlines and the rest of the related tourism industry are not just big advertisers, but also often have cross holdings in media companies. In addition, most airlines in India have deals with print and television media for barter on ad space against travel and other aviation services, like maintenance of aircraft and helicopters.

We would expect the tourism industry to come out very strongly with a statement on this issue of fake pilots. There is going to be no dearth of tourists who are going to think multiple times before boarding a domestic flight in India. That would certainly be in the ‘National Interest’. The tourism industry could start with running a boycott of some of the airlines which have been the more flagrant violators of aviation safety.

Why has the tourism industry not spoken up? Well, National Interest could be one reason, though the real reason probably has to do with the fact that the tourism industry is heavily linked with the travel industry, and the travel industry is going to be selectively strangled by the aviation guys if they dare speak up. Every large hotel chain, every travel company—depends on the Ministry of Civil Aviation and DGCA, who depend on the aviation industry. Better to keep quiet.
3) Aviation incident reports need to be made totally public, and available to travellers as well as others not just free of charge on the Internet after things are over, but also co-terminal with the proceedings which need to be open to the public. As of now, most of the truth probably gets shielded in National Interest, whatever that means. Even in the Indian Air Force, casualty and incident reports are freely distributed to airmen, so that they will learn from things.
Likewise, in other countries, the aviation regulators and authorities have a system of proactively encouraging incident reports from not just cockpit crew, but also cabin crew, ground staff and passengers. With the advent of the Internet, awareness and knowledge of matters pertaining to aviation is very high, and many people other than the pilot know what is going on —and when it is going wrong.
Within India, the DGCA and others do not even now have a working system, to accept and review inputs from those impacted by deficiencies in civil aviation. This needs to be fixed, very soon, and made public. As of now, anybody from within the industry complaining about an incident is usually marked as a whistleblower and then taught such a lesson that he or she never goes back to do so again, and anybody from outside the industry—like a passenger or other user—simply does not have an avenue.
However, if you scan the various Internet groups on the subject, then some of the experiences are terrifying. The regulator, DGCA, needs to fix this. Soon.
4) Taking "tests" for new entrants is another racket that needs to be controlled and regulated by the DGCA. As on date, a half-day "test" for a co-pilot's job sets a candidate back by Rs20,000 and more. Typically, for recruiting all of three-five co-pilots, an airline will place an advertisement, and attract anything between 300 and 3,000 applicants.
All of whom will put down Rs20,000 or more. And use all the clout they have. To answer a 2-page question paper, and if lucky, then move on to an oral viva. After which, most of them will not be given even the courtesy of a response, and will simply not get their money back.
Certainly, airlines and other employers are entitled to their own procedures, but do the math— look at the amount of money that is flowing. And that is not all—if selected, a co-pilot has to typically place a "deposit" of around Rs20-Rs25 lakh with the airline, which he or she then has to pay back from the earnings generated.
Of course, DGCA knows about this—there are names and phone numbers of DGCA "touts" pertaining to this "service" available on the Internet groups, openly. As a matter of fact, like pamphlets for apartments on rent, similar small handbills were available at the JorBagh Metro Station right opposite Safdarjung till not too long ago. What DGCA can do is to try and regulate this process of taking money for examinations and then deposits. In the National Interest.
5) As we said earlier, over 90% of domestic air passenger travel in India is "business travel", and is paid for by commercial entities. One word or line out of place by any business leaders, and they would probably find that they have to take commercial flights, too.
And that wouldn't really do, would it? I mean, can you imagine—what if you were not permitted to take your private business plane to watch India defeat Pakistan yesterday?
It is loud and clear that the issue of fake licensing is going to die out soon, like so many other issues have done so in the past. However, the big difference now is something called "transparency", where much information is easily available, to those who seek it. It therefore remains to be seen what WE do with this information, if WE are interested in fixing things.
As a sidelight, here's a list of all the aircraft that operated to and from Chandigarh Airport on The Day, 30th of March 2011. It should be known that this is publicly available information, all timings are in GMT (IST minus 5 hours 30 minutes) and that the list includes military airplanes as well as civilian airplanes. All times are "airborne", means when they took off from Chandigarh.
Will we ever know if the commercial business houses who used their aircraft—were these placed in their books as business expenses or as personal expenses? Likewise, there were some amazing diversions, for example, Kingfisher Chennai to Mumbai, operated via Chandigarh. And then, to make things more interesting, a very brief analysis on the order of departure shows who is what.
1812: Prime Minister of India (B738)
1828: Prime Minister of Pakistan (A310)
1832: 2nd plane from Prime Minister of India (B737)
1849: Vijay Mallya's personal plane. (A319)
1855: JSW Steel Bombardier-100 OP Jindal group
1858: Mukesh Ambani's personal A-319
And then there were the rest, comprising both Indian and Pakistani aircraft.



Shadi Katyal

6 years ago

We in India should have a national motto
CHALTA HAI BHAI and thus neither the DGCA nor the defunct Flying clubs will have to answer anyone at all which is true anyhow.
True that business houses should be the first one to cry for such mismanagement but than who knows the poor companies
plight in other areas of lack of power,IT,baksheesh and what not.One must consider the atmosphere in which these companies have developed and survived.
We Indians are meek when it comes to taking some action where any department of Govt is concerned but willing burn buses and trains which are the necessity of the nation..
One has to consider that if DGCA officer has a fixed price for issuing fake licenses and even the Media is unwilling to take the case, what a business house can do.
Why is media so quite. When one learns of Flying school defunct and closed issuing such mark sheets and nothing id done, who is responsible to ask the public to bycott flying till truth is unveiled. An employee cant refuse or loose job and thus flies but where is the DGCA and what action has been taken by any vigilance committee. Why is public being kept in dark.
Airlines who have spent Crores of Rupees on equipment are also responsible for this as when CVC is presented should they not know whcih flying schools,Rajshatn,are out of service.It is catch 22.
Foreign tourist are already changing their destinations and if the Indians wish to shoot themselves why should the world worry.
Hoe inept and corrupt we are. shame

Calls revive for a sector regulator to stabilise the troubled realty business

Industry experts underline need for good governance by real estate firms; propose that REITs could ensure regulatory compliance and alleviate funding strains

With the real estate sector suffering from a multitude of problems, once again industry intermediaries are talking about the need for a sector regulator. With bloated prices, low off-take, funding difficulty and corporate governance issues, the real estate sector is attracting much negative publicity. Experts are proposing that the companies shift to a new model that will be transparent and cautious.

 According to Apurva Muthalia, chief executive officer, IL&FS Milestone Core-Plus III, it’s time that the sector responds to allegations about a lack of transparency. A report by Motilal Oswal quotes Mr Muthalia as saying that a sector regulator would be a welcome move.
Despite improved corporate governance, the industry suffers from a lack of transparency with regard to land procurement, government approvals and end-buyer transaction. Reports of realty firms involved in scams have also led to an erosion of public confidence. “Given the shape, its size and scale, having an industry regulator for real estate will be beneficial,” the report says.
It may be recalled that Ratan Tata, the Tata group boss, spoke about the need for a real estate regulator a few months back.
A report by Ideas 1st Research states that firms and companies that have a commendable record in corporate governance are likely to attract investments. “There have been a few Mumbai specific instances where companies to get undue financial gains, went overboard and added extra layers of FSI, by milking the generous parking lot, hospitality and rental housing schemes,” the report says. “While these can have a lasting impact on a few companies, we believe that other developers have been unduly penalized by across the board panic selling of the sector.”
The report states that the ideal companies are those which do not have corporate governance issues, have not misused FSI norms, have resilient business models and low debt-to-equity. Ideas 1st Research says such untainted companies will gain appreciably in the next 1-3 years, when the disconnect between their fair value and the market price will exacerbate and become more visible.
Institutional and equity funding has emerged as a serious matter during the slowdown. Long gestation projects that used to attract most funds, have not shown significant returns and a number of investments were prematurely liquidated during the downturn. As a result, investors are now looking at safer and hassle-free smaller projects like residential projects and income-generating commercial assets with relatively moderate internal rates of return, characteristic of low-risk ventures.

Mr Muthalia has an optimistic long-term view of the sector, despite the recent slowdown. He feels that the stringent attitude by banks is a temporary issue, and that in the long run the sector will see considerable scaling up. FDI has gone up in recent years and post the downturn, most developers and firms are treading cautiously to avoid any further pitfalls.
The IL&FS Milestone Core CEO feels that a real estate investment trust (REIT) will prove to be a game changer, and that it would ensure both sector regulation and better returns for stake holders. A REIT provides a similar investment structure for real estate as in mutual funds for stocks.
Mr Muthalia says that this structure would ensure good exit options for real estate funds and provide office space developers with attractive financing options. REITs will also be beneficial for smaller investors and tenants. Moreover, it would ensure a strong degree of regulatory compliance for real estate projects.

But he agrees that India would have to wait a few years for REITs. “Indian industry is in a nascent stage for REIT and requires another 2-3 years to attain the critical mass. In the last few years the available commercial stock has also grown sharply, which bodes positively for successful introduction of the REIT model going forward.”



HDFC Bank opens 275 branches this fiscal

HDFC Bank has opened 275 branches in the current fiscal taking its total network to 2,000

In a bid to increase its footprint, the country’s second-largest lender HDFC Bank opened 275 branches in the current fiscal taking its total network to 2,000.

The bank had a distribution network of 1,725 branches in 779 cities as of March 2010 which increased to 1,780 branches by the end of December 2010. About 220 branches were added to the network in the last few months.
With the opening of new branches, the bank’s reach has crossed 1,000 cities. Besides, the bank has overseas presence in Hong Kong and Bahrain.As per the annual report for 2009-10, the bank opened over 300 new branches during the year. The bank’s focus on semi-urban and under banked markets continued, with 68% of the bank's branches now outside the top nine Indian cities.
The bank, which has over 1.8 crore customers, acquired Centurion Bank of Punjab leading to the integration of 404 branches in 2008.For the quarter ended December 2010, the bank reported a 33% growth in its net profit at Rs1,088 crore compared to the same period a year ago.Total income of the bank rose to Rs6,357.8 crore at the end of the December quarter, from Rs4,933.9 crore in the same period last year.The bank’s net interest income went up by 24.9% to Rs2,777 crore in the third quarter of the current fiscal.
The bank’s net interest margin (NIM) remained static at 4.2% in the third quarter. NIM, which is the difference between interest income of a bank and interest paid, was 4.4% at the end of December 2009.

On Thursday, HDFC Bank ended 0.22% up at Rs2,342.95 on the Bombay Stock Exchange, while the benchmark Sensex gained 0.80% to 19,445.22.



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