Bloomberg News

U.S. FAA Cuts India Aviation Safety Ranking as Standards Not Met

January 31, 2014

The U.S. Federal Aviation Administration cut India’s safety ranking for the first time citing a failure to meet requirements, a move that could thwart local carriers’ expansion to the world’s biggest aviation market.

The FAA lowered the rating to Category 2 from Category 1, Ajit Singh, India’s civil aviation minister, said in New Delhi today. Singh said he was disappointed with the downgrade and added there was no reason to think of any retaliatory action.

The downgrade -- bringing India equal with Zimbabwe, Paraguay and Indonesia -- means the country’s carriers can’t start new services to the U.S., and their planes are subjected to additional inspections at airports there. The move is also a blow to the South Asian nation’s efforts to boost the aviation industry after Prime Minister Manmohan Singh’s government eased investment rules and spent billions of dollars to upgrade more than a dozen airports.

Two of 31 aviation issues raised by the FAA still remain unresolved, Singh told reporters.

State-owned Air India Ltd. and Jet Airways (India) Ltd. (JETIN) are only two carriers from India that have services to the U.S.

Indian carriers have ordered hundreds of aircraft from Boeing Co. (BA:US) and Airbus Group NV (AIR) as they expand in one of the fastest-growing aviation markets in the world. Singh’s decision in September 2012 to ease investment rules have attracted AirAsia Bhd. and Singapore Airlines Ltd. (SIA) to start new ventures in the nation of 1.2 billion people.

AirAsia, Etihad

AirAsia and Singapore Air have both tied up with India’s Tata Group for separate ventures while Abu Dhabi’s Etihad Airways PJSC has bought a stake in Jet Airways. They are seeking to tap a market where passenger numbers forecast to triple to 452 million by 2020.

The FAA also doesn’t support reciprocal code-share arrangements between Category 2 nations and U.S. carriers, according to its website. Jet Airways has a code-share pact with United Continental Holdings Inc. (UAL:US)

Under the International Convention on Civil Aviation (Chicago Convention), each country is responsible for the safety oversight of its own carriers, according to the FAA website. The FAA assesses civil aviation authority of each country that has airlines operating to the U.S.

An IASA assessment determines if the foreign authority provides oversight to its carriers that operate to the U.S. according to international standards.

A Category I rating allows airlines to add more services to the U.S. “in a normal manner and take part in reciprocal code-share arrangements with U.S. carriers,” according to FAA website.

To contact the reporter on this story: Anurag Kotoky in New Delhi at akotoky@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net


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