At least half-a-dozen aircraft of a low-cost Indian carrier (LCC) are currently being used as ‘Christmas trees’. While grounding aircraft because of faults and then stripping them for parts is an accepted practice among airlines the world over, it has become the norm rather than an exception for this Indian LCC.
A long drawn covid-19 induced travel ban and then the gradual opening up of flights, with continued fare caps, have hurt all Indian airlines. Some, more than others. The sustained financial troubles are now easing but the LCC mentioned above has been struggling for cash for daily operations. It also owes significant sums to vendors who do maintenance checks on its fleet.
If it were to send some aircraft parts for regular maintenance activities to these vendors, they would demand past dues. This vicious cycle of dues and inability to honour payments has left the airline with no option other than to use grounded aircraft as ‘Christmas trees’ and stop purchasing new parts.
There are more instances of this cash-strapped airline cutting corners. An industry veteran said that the airline was sometimes using what are known in aviation industry parlance as “submarine parts”. These come cheaper than regular aircraft parts but may have questionable warranty/guarantee and low reliability.
The woes of airlines have come into sharp focus in recent weeks as multiple mid-air incidents have brought the spotlight back to safety and whether the regulator, the Directorate General of Civil Aviation (DGCA), is doing enough to ensure safe operations by all airlines. Should passengers be worried before taking to the skies?
Aviation safety consultant Mohan Ranganathan says that during the covid-19 induced lockdown, airlines did not do mandatory maintenance procedures such as testing for hydraulics and electronics. Mandatory engine runs were ignored as “airlines were only looking at bottomlines. They laid off a large number of people”. Even the DGCA did not conduct enough checks, he added.
Queries to director general of the DGCA, Arun Kumar, remained unanswered.
As per a written reply in the Parliament on 28 July by minister of civil aviation Jyotiraditya M. Scindia, 478 technical snags were reported in the last one year, between 1 July 2021 and 30 June 2022. “A total of 177 surveillance, 497 spot checks and 169 night surveillance have been carried out by the DGCA on engineering and maintenance aspects of scheduled operators during the last one year,” the minister informed.
Special audits, spot checks
In recent weeks, Arun Kumar has reiterated multiple times that Indian skies are safe but an 18 July order signed by deputy director general Tuhinanshu Sharma refers to “reports of increased engineering related occurrences in scheduled airlines in recent times” and the need to ensure that airlines are adhering to the laid down standards.
In the same order, Sharma goes on to announce a ‘special audit’ of all scheduled airlines, commencing the very next day. The focus of these audits would be: availability of sufficient and suitably qualified, experienced manpower; hangars, stores, spares and equipment; availability of current maintenance data for all types of aircraft in an airline’s fleet; aircraft grounded due to lack of spares; adequacy of turnaround times during transit.
It is interesting that Sharma has specified that the audits would be “special” and also defined specific areas of focus, while minister of state (MoS) for civil aviation V.K. Singh has referred to ‘spot checks’ by the DGCA earlier to assert that everything is fine in the Indian skies.
In a written reply in Rajya Sabha on 25 July this year, Singh said “a series of spot checks were carried out recently on all operating aircraft of M/S SpiceJet from 9 July to 13 July. A total of 53 spot checks were carried out on 48 aircraft which did not find any significant finding or major safety violation.” Singh was responding to a question about multiple incidents involving SpiceJet aircraft in recent weeks.
What the special audits throw up and what subsequent remedial measures are taken by the regulator will become clear in the coming months. But spot checks are usually conducted after an advance warning is given to the airline, said an aircraft maintenance engineer, thus giving the airline time to prepare for the check. He declined to be identified.
“Spot checks include checking whether procedures are documented. Line aircraft are inspected visually, logbooks are checked. Component tags are checked—whether they have been marked ‘serviceable’ or ‘non serviceable’,” this engineer said.
Visual checks may not suffice when the issue of multiple engineering failures is at hand, said an industry veteran.
Meanwhile, MoS Singh said in the same Rajya Sabha reply that “as a safety measure, DGCA ordered M/s Spicejet to use certain identified aircraft (10) for operations only after confirming to DGCA that all reported defects/malfunctions are rectified.” Subsequently, SpiceJet said it has rectified the defects and all the 10 aircraft were back in operation.
On 27 July, the DGCA restricted SpiceJet to operating only 50% of the flights approved for the summer schedule. The restriction applies for eight weeks and came as an interim order from the regulator. Industry watchers pointed out that the airline is already operating a reduced schedule and the latest diktat may not have any significant impact on the number of flights.
That airlines have been hit hard by covid-19 and then with continuous cost escalation is no secret. Brokerage ICICI Securities has said in a note that the price of jet fuel climbed 35% and the rupee fell by 3% against the dollar in the June quarter versus the March quarter. So, despite “strong fares”, the airline sector is expected to post losses for the June quarter. In FY22, three airlines—IndiGo, SpiceJet and Air India—were projected to post the highest combined losses in a decade at ₹20,000 crore (SpiceJet and Air India results are yet to be made public).
As airlines continue to struggle financially despite the return of passenger loads and pricing power, many have had to cut costs significantly.
Satyendra Pandey, managing partner at aviation advisory AT-TV, said that the airline industry has been hit hard by currency fluctuation, elevated jet fuel prices and rising cost of financing. And the fare floor prices levied by the regulator, since flights restarted after the covid-19 lockdown, are making matters worse for the sector since it has kept the weaker airline companies from going under.
“Ideally, the DGCA should move away from pricing. The price bands implemented during covid-19 are acting as price floors, not ceilings. A price floor bars airlines from discounting below a certain level. This helps some airlines to artificially survive—they would have otherwise been bled dry by competition—because everyone is barred from deep discounting. Market forces must be allowed to operate,” he said.
Fare bands with upper and lower limits were first introduced by the government when the pandemic hit, in May 2020. They are revised from time to time to factor in the price of Aviation Turbine Fuel (ATF).
Lack of pricing options and the squeeze on margins push airlines to cut costs any which way. An open secret within the domestic operators is the tendency of at least one LCC to cancel and then club flights at the last moment. So, for example, if it has opened bookings for six Delhi-Mumbai flights on a particular day, it may choose to cancel three of these flights within hours of departure because these do not meet the variable costs. Variable cost includes charges for navigation and fuel, cabin crew salary, ground handling and lease costs. The airline then clubs the flights and since all data on cancellations, delays, etc., is self- reported, this clubbing may not reflect in the overall flight data for domestic operations.
Not just clubbing flights, airlines are also compelled to ignore or postpone engineering issues since some of them simply don’t have the adequate number of people for certain jobs.
Jobs, salaries, heartburn
Indian airlines have a people problem.
During the covid-19 months, most airline companies reduced manpower. The cycle swiftly reversed and now, there’s a sudden expansion of airline jobs.
Two new airlines—Akasa Air and Jet Airways—are taking to the domestic skies and since they’re starting from scratch, manpower needs have got amplified across all categories, licensed as well as unlicensed. Besides, Alliance Air and Air India have begun hiring across roles; the Gulf airlines have opened up cockpit crew positions.
Also, airlines are expanding their fleet, which adds to the jobs glut. Aviation consultancy CAPA has forecast that India’s airlines will add 40 aircraft this fiscal though the net addition could be lower since some of the aircraft would be replacements of those leaving the airlines’ fleet.
An official at a full-service carrier pointed out that while job openings have increased due to the two new airlines, there has been commensurate growth in the talent pool available. Covid-19 disruption meant freshers were waiting in the wings and manpower availability is no problem across roles in security, cabin crew and ground staff. But the Gulf carriers have suddenly increased hiring and this is affecting cockpit crew availability for Indian carriers.
“Overall, the attrition rate for the industry is up. Employees are lining up for job interviews at the new airlines in the hope that while salaries may not be significantly higher, new growth opportunities would be available,” this official said.
Meanwhile, a senior official tasked with aircraft maintenance explains that another DGCA order— mandating ‘category B’ engineers at all stations an airline operates from—would raise the costs for all airlines. Airlines have to spend up to ₹10 lakh per engineer on training alone, which takes about five years. This is in addition to their salaries. Till now, technicians were posted on many stations.
In maintenance jobs, the category B engineers top the hierarchy chart that includes category A and the technicians. The B engineers are needed for major maintenance tasks in an aircraft; A engineers do simpler tasks. For example, if an aircraft is arriving to Delhi from Bengaluru and is scheduled to leave for Mumbai in 45 minutes, category A engineers are tasked with refuelling, visual inspection, tyre change, handling cockpit defects as reported by pilots, and other cabin issues.
This category of manpower is cheaper. While category B engineers can make ₹1.2-1.3 lakh per month, the A engineers are paid 30-40% lower. The lowest in the pecking order, the technicians, make ₹30,000-40,000 a month, according to industry estimates. They usually hold a diploma in the select field. Recently, this section of employees has been calling in sick, seeking better wages.
There is also heartburn among employees of some airlines about steep salary cuts they took during the covid months—especially the cockpit and cabin crew. These cuts have not been fully rolled back by some employers. One LCC rolled back the cuts for cabin crew just a few days back.
A senior pilot said on the condition of anonymity that pilots have been hit with deep salary cuts. Some did not receive any salary whatsoever for months and even now work on diminished pay. These financial worries affect their performance and, in turn, their focus on safe operations.
Another aviation industry expert said that airlines are flogging pilots to cut any and every cost. At times, a cheaper hotel is booked for layovers, far away from the airport. The pilots and cabin crew have to contend with extra travel before and after a flight.
“This, and other cost cutting measures, lead to mental pressure and there is a lot of burnout in the sector. People are leaving even stable airlines not because pay is not okay or brand isn’t good enough but because they are disheartened and under pressure,” this expert said.
He also alluded to the condition of the non-licensed staff such as drivers of airport buses, ground handling staff and technicians to add that many had to work two shifts at the airport after the covid-19 disruption to make ends meet. This category of employees is now either looking for alternatives within the industry or resorting to unionism to make itself heard.
India’s airlines, therefore, are faced with multiple headwinds: elevated costs of fuel and manpower, uncertainty due to currency fluctuation, increasing domestic competition even as fare floors remain and red ink splashed on balance sheets. In such a scenario, safety could be a casualty.
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