Technology has assisted humans in escalating themselves in every aspect of their lives. The invention of powerful machines and gadgets has contributed to the reduction in the communication gap, globally. There are several modes through which man can interact with people, living miles away. The aircraft introduction has also marked a remarkable change in improving human conditions. The application utilization of airspace technology as a channel to travel to different countries and states is avaricious. The social, as well as legal relationships among countries, have gradually improved. The Indian aviation industry, in 1994, experienced airline deregulation, and this emanation brought a new business model, intending to change the way people travel in India[1]. The need for aviation maintenance and adopting rules and regulations became a prime concern for society. Thereinafter, the Indian civil aviation heralded for the growth and expansion of the industry by emphasizing on Low-cost carriers, domestic airlines pivoting Foreign Direct Investments ( FDI ), more information technological developments, and improvised and modern airports with better security infrastructure[2].
What is aviation law?
The legal framework of airspace issues and maintenance, aircraft navigations, airport operations, air traffic control and regulation, and much more are all covered under aviation law[3]. Aviation law could be defined as the set of laws or regulations, to the subject-matter of the aviation industry when applied on business in every market, where the seller sells products relating to the business along with the rules and regulations provided by the Federal Aviation Administration (FAA). The latter enforces most of the aviation rules and regulations standards. The Transportation Security Administration (TSA) shields the passenger safety concerns in the airlines. The National Transportation Safety Board (NTSB), scrutinizes the aviation accidents and also at times synchronizes aviation safety.
The low-cost carrier archetypal for commercial aviation has paved way for a third force independent maintenance, repair, and overhaul facilities (MRO), where maintenance jobs are outsourced excluding the line maintenance which is supposedly settled in-house[4]. With the frequent use of aircraft, it becomes significant to follow proper care to parallelize the guidelines. This situation also provides an opportunity for entrepreneurs to join this independent aviation business and work for airspace maintenance. The vying between airlines and charter operators have ordained the operators to cooperate and consider cost-cutting measures in their propaganda.
Impact of Aviation laws
Bilateral Agreements
India has sanctioned several air service agreements with several countries following the latest Civil Aviation Policy, 2016. The Indian government, through this policy, looks forward to liberalizing the airspace agreement reign for providing smooth conduct of international operations and tapping the global passenger market. India approved and signed the open skies agreements with six countries: Finland, Guyana, Spain, Sri Lanka, and the Czech Republic, at the International Civil Aviation Negotiations, 2016.
Popularity
India has occupied the third-largest domestic aviation market, globally. India is also expected to overtake the United Kingdom to grab the title for the third largest air passenger market by the end of the year 2024[5]. The domestic growth of Indian air passengers has eventually increased by 21.77% by the year 2017. The rising air traffic has also increased the demand for more airports, which as of March 2019 is said to be 103. There is an estimation of 190-200 operational airports in the upcoming years. The international traffic in mid-2017 experienced an increment of 7.5%. As of now, Indigo ranks to be at the top, in terms of passengers and fleet size, owing to a maximum of 48.1% of total domestic market share[6]. The other airlines are Air India, SpiceJet, GoAir, Air India Express, and others.
Regulatory Authorities for Aviation laws
The Ministry of Civil Aviation conducts the Aircraft Act, the Aircraft Rules, and other airspace provisions. It establishes national policies and frameworks that help in the development and regulation of the aviation sector. It governs the Directorate General of Civil Aviation (DGCA), the Airport Authorities of India (AAI), and the Bureau of Civil Aviation Security (BCAS) and also has the power to enter into airspace agreements with other countries[7].
The Directorate General of Civil Aviation (DGCA) essentially purveys with safety concerns and operational issues. It also implements the formulation of standards of airworthiness for civil aircraft, which are registered in India; and also grants certificates to the concerned aircraft. It also investigates the accidents and incidents that take place and provides for preventive measures and safety programs[8].
The Bureau of Civil Aviation Security (BCAS) surveils the security measures and standards of civil aircraft, both at domestic and international airports.
The Airport Authorities of India (AAI) facilitates the development, proliferation, and up-gradation of the terminal as well as operational workflow at airports in India. It controls and manages the airspace expanding beyond the territorial boundaries.
Challenges in Aviation Sector
Globally, a majority of airlines have a specific blueprint of their vision and they work accordingly. The expansion of the airline also makes it vulnerable to external factors. The economic dropdown, as well as political propaganda, plays a vital role when an airline company becomes unstable, the former two are significant underlying determinants for long-term air traffic growth, as stated by Ernst & Young in a report[9]. The provided risks below are some of the major concerns that any airline company should be ready to fight:
● The Fickleness of political and economic environment
● Organizing the supply chain
● Tough competitions among domestic and international flight carriers
● Capability to perform key contracts
● Complying with several regulations and restrictions, simultaneously
● Incapacity to bring originality and innovation
The Jet Airways Saga: A Summary
Jet Airways Ltd., during its normal functioning, has been very successful. It was founded by Naresh Goyal and Anita Goyal, who almost post 3 years of Air India domination in the year 1992 brought Jet Airways. The company had an average fleet rate of 4.45 years and dealt with the major domestic as well as international routes. The company had the privilege of attracting tourism and businessmen due to the positive reputation it had created in the period. It was known for its punctuality and great customer service[10]. The company was the only private service carrier till April 2017; further two more domestic low-budget airlines namely, Indigo and SpiceJet hit the market. The downfall for Jet Airways started in 2017 when Indigo topped the passenger market share growth. This made a huge impact on Jet Airways financially, and by March 2017, its aircraft were grounded as the company lacked in payment of the lease. As a result, the Indian Oil Corporation (IOC) also terminated the contract, and no fuel was provided to the affected airline. In the year 2018, Jet Airways paused its activity for international flights and only continued with the domestic ones[11]. The year 2019 experienced a massive disturbance when the founder Naresh Goyal resigned from his post. This also stopped the domestic flights from working. The crisis was critically due to the illiquidity which consequently caused great losses to the company concerning payments for lease, employees’ wages, required fuel, and maintenance. Further, the National Company Law Tribunal issued a corporate resolution to analyze the insolvency process of Jet Airways. This has put the aviation industry in a situation where it is really difficult to get rid of the dark side of the insolvency laws and regulations. Considering, the Jet case is the first-ever Indian case where an airline was to undergo an insolvency proceeding. During the closure, Jet Airways was under a debt of $ 1.2 billion, which was whopping in nature itself. The Board of Directors had to face the proceedings against the Enforcement Directorate (ED). Many standard companies were willing to file against them an Expression of Interest (EoI), such as Etihad and Vedanta. Etihad had bought 24% of the stakes of Jet in the year 2013. By mid of 2019, a Panama based Avantulo Group had finally submitted an EOI for the crisis-hit airline[12]. The National Company Law Appellate Tribunal (NCLAT) had interrogated with the company’s lender that if anyone was interested in cooperating with the Dutch Administrator, who was also trailing an insolvency proceeding against the Jet Airways. Later, the resolution professional for Jet had agreed to cooperate with the Dutch insolvency administrator to look into the matter. This crisis nevertheless assisted SpiceJet, the rival company to have a record profit of Rs 261.7 Crores in June 2019. Further, Vistara and SpiceJet had occupied the Jet’s Boeing 737s in their respective fleets. SpiceJet was given the maximum 100 slots of the Jet Airways located at Delhi and Mumbai and Air India were provided with 12 of the remaining[13].
Conclusion:
India is a growing market for the aviation industry and is also growing traffic in the airspace and giving a tough competition to several global airlines. Individually, every airline is working on its weaknesses and improvising its service, fares, on-board services, and much more. The connectivity has gradually increased with time too. With huge opportunities, the airline sector remains expensive for a particular class of the public. There is an urge for the industry stakeholders to dive into this matter along-with the concerned board members to formulate more rationalized and refined policies, which perpetually focus on quality, cost, and time of the passengers.
[1]Vinay Nair, Indian Aviation Laws, (2016), https://www.scribd.com/document/325649137/Research-Paper-on-Indian-Aviation-Laws [2] Ibid [3]What is aviation law?, (June 20, 2016) , https://hirealawyer.findlaw.com/choosing-the-right-lawyer/aviation-law.html [4] Ibid [5]Report of Working Group on Civil Aviation Center, NTDPC, June 2012, https://www.civilaviation.gov.in/sites/default/files/Committee%20reports%2015.pdf [6]Best Airlines in India 2020, (Sept 12, 2019), https://travelobiz.com/best-airlines-in-india/ [7] Ibid [8] Ibid [9]The top 10 risks the aviation industry is facing, ( Jan 1, 2020), https://blog.satair.com/ten-risk-in-aviation-industry#:~:text=Understanding%20the%20types%20of%20risks,is%20lurking%20in%20the%20background [10]Ashutosh Kolte,Financial structure instability as failure symptom in aviation industry: The Jet Airways Bankruptcy Case, (Sept 2019), https://www.researchgate.net/publication/336116144_Financial_structure_instability_as_failure_symptom_in_the_aviation_industry_-the_Jet_Airways_bankruptcy_case [11] Ibid [12] Ibid [13]Jet Airways insolvency case: Creditors to seek fresh bids, ( Dec 23, 2019), https://www.bloombergquint.com/business/jet-airways-insolvency-case-creditors-decide-to-seek-fresh-bids
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