By Courtney Trenwith
US aviation regulator downgrades Indian carriers over safety concerns, forcing halt to codeshare agreements
One of the largest airlines in the world has suspended its code-sharing agreement with Jet Airways, which is part-owned by Etihad Airways, after the Indian carrier’s safety rating was downgraded.
The US’s Federal Aviation Administration has cut India’s aviation industry from category 1 to category 2, the same level as Zimbabwe, Indonesia, the Philippines and Bangladesh, in a move that could significantly affect the airlines commercially.
The decision means the Asian country’s two airlines servicing the US, Jet and Air India, cannot launch new services to America and are open to increased safety checks.
The regulator claims the airlines failed to fix previously raised safety concerns, including appointing an adequate number of flight operation inspectors.
"The FAA has determined that India at this time is not in compliance with the international standards for aviation safety oversight," the US regulator said in a document released by the Indian government.
Soon after the decision was made public, the second largest carrier in the US, United Airlines, suspended its code-sharing agreement with Jet, based on US law that does not allow American airlines to coordinate with category 2 carriers.
The decision, which affects seven weekly flights between the countries, took effect on Saturday, forcing passengers to be rebooked.
American Airlines Group Inc. (AAL) also withdrew its booking code from Jet Airways, covering one domestic route flown by the Indian airline, Bloomberg reported.
Abu Dhabi-based Etihad Airways bought a 24 percent stake in the Indian carrier last year in the first deal after the Indian government opened up foreign investment in its aviation sector.
But any plans to expand the airline’s network could be negatively affected by the FAA downgrade, which industry commentators said was likely to have a flow on affect.
Amber Dubey, head of aerospace and defence at consultancy KPMG's Indian unit, said safety regulators in some other countries may follow suit, which would then affect carriers such as IndiGo and SpiceJet that fly to the Middle East.
"FAA's downgrade typically has a domino effect," Dubey told Reuters.
The European Aviation Safety Agency said on Friday it was closely monitoring operations by non-European Union airlines but so far had "no major concerns" with regard to India, the news service said.
Jet Airways and Etihad have not publicly commentated on the issue.
Indian Aviation Minister Ajit Singh said India would address all the FAA’s issues by March.
"It's very disappointing and also surprising," he said.
"In our view, 95 per cent of all the issues raised have been solved."
Code share agreements by US carriers & Jet Airways (9W) will be broken resulting in Etihad will get chance to fly Jet's passengers to USA via Abu Dhabi. This will also prompt growth of EU carriers to take Indian passengers to USA via EU. Air India's growth shall be obstacled on direct USA routes. Air India shall be limited to Gulf, EU. Air India should increase foothold in Gulf, Africa (Nairobi, Dakar Senegal, South Africa) & South east asia (Jakarta), Ho Chi Minh City to continue its expansion.