DGCA hauls up carriers on financials statements

The Directorate General of Civil Aviation (DGCA) has asked all carriers to submit their financial statements by next week to ensure that loss-making airlines do not cut corners in matters related to safety of fliers.

A top DGCA official said that they have only asked airlines to provide them the books of their financial performance. " We are not going for a financial audit as we are not authorised to do so. But as many airlines have reported massive financial losses this year, we fear that airlines may compromise on safety due to lack of funds. We just don't want them (airlines) to do that," the official said.

DGCA has also warned airlines to comply with the order by June 13 failing which their licences may be cancelled. The notices have been issued to fullservice airlines like Air India (AI) and Jet Airways as well as low-cost carriers GoAir, SpiceJet and IndiGo (the only profit-making airline).

Responding to DGCA's move, civil aviation secretary Ashok Lavasa said, "We keep giving directions to DGCA. The DGCA has to ensure that they do it in compliance to the law." A letter dated June 12, 2012, written by a civil aviation ministry official said, " It is noticeable that under the Aircraft Act, the ministry of civil aviation alone has power with respect to economic regulation of air transport.

The safety regulations of DGCA on financial stress need to be redefined and rechristened.

The financial surveillance by DGCA gives an impression as if DGCA is undertaking financial audit of financial statements of airlines. It is suggested that the relevant civil aviation requirement be termed as assessment of impact of financial stress on safety of operations rather than financial surveillance." A DGCA official said, " Many Indian carriers have ordered new planes, which we believe does not match with their financial performance.

We also need to see how much is spent against different heads, on safety, engineering, infrastructure, salaries and other mandatory requirements. We just cannot take any chance now. We will be presenting our case to USFAA. We have to prove that we have put in some best practices."

Courtesy: Mail Today