As reported late last year by FT, the ICAO safety audit that downgraded the Thai aviation system to Category 2 basically said Thai commercial aviation is deficient and not up to snuff to international minimum safety standards, a notion later endorsed by both the US FAA and their European counterpart EASA after conducting their own audits.
     However, the downgrading of Thailand to Category 2 in the U.S. did not affect the Thai registered carriers all too much, as Thai Airways (TG) had stopped serving their only U.S. destination—Los Angeles (LAX)—in October 2015 and Bangkok Airways (PG) operates only intra-Asian flights.
     Still, the FAA’s verdict affects the ability of TG, PG, and others to interline and codeshare with partner airlines from the U.S., which at least for TG is seriously draining the already cash-strapped carrier. Thai Airways has laid off 20 percent of its staff and grounded aircraft—including its two 747-400 freighters—in order to cut back expenses.
     In the meantime, other Asian countries heeding the warnings have restricted Thai flag carriers’ abilities to change schedules, introduce new services, change aircraft types, and operate charter flights.
     Thailand barely escaped a serious setback, as the European air transport watchdog EASA did not follow the FAA in downgrading the Thai aviation system by restricting the ability of Thai carriers to operate services to, from, and through Europe, but merely announced that “the developments in the Thai aviation system were monitored continuously and that EASA would help Thailand to get their oversight up to internationally accepted standards.”

Change Is Coming

     But as you read this, the Thai government is taking some decisive action.
     The Royal Thai Department of Civil Aviation, DCA, has been shut down and a new regulatory body, the Civil Aviation Authority of Thailand, is in place, built up from scratch with qualifications and staff performance now under review.
     A team of safety and security experts from the UK is boots on the ground in Thailand and has been at work there since early February, providing assistance to install nothing less than a complete overhaul of Thailand’s aviation system.
     All 41 Air Operator Certificates (AOCs) issued by the former Thai DCA have been suspended and are valid only on a probationary basis, subject to reevaluation and ultimate reissuance or revocation depending on the findings of audit teams led by the British safety experts.
     It’s a fact that 28 out of 41 airlines registered in Thailand operate international flights, and it is understood that a crucial point of the proceedings is the ability of the new Thai aviation body CAAT to deal with the shortcomings surrounding LCC carriers in particular.
     Currently, the Air Traffic Pilot Licenses of 2,350 pilots in Thailand have been under review and reissued only where stringent international requirements have been met and the British experts’ stringent criteria fulfilled.
     So maybe a new dawn is breaking on the Thai aviation sector’s horizon?

It Don’t Come Easy

     The main task of the British experts has been the almost herculean task of training their Thai counterparts to a minimum level matching international standards.
     The task is made that much more difficult because the training work must also include language proficiency and address some serious shortcomings with respect to safety and security issues, including enforcement of Dangerous Goods Regulations in Thailand by Thai operators.
     Despite progress, sources say the training is massive and ongoing and will take several months.
     Only when a sufficient number of Thai aviation inspectors have successfully completed the mandated training will the inspections of the Thai-registered airlines begin, issuing these carriers AOC’s.
     However, it looks like that could begin this month in May 2016.
     Bangkok Post reports that the process of inspections and reissuing of both AOCs and ATPLs for Thai carriers and pilots is hoped to be completed before the end of 2016, although officials cautioned that the undertaking depends largely on a sufficient number of the CAAT’s staff to pass their own recertifications in order to exercise the oversight required.
     That the Royal Thai government seems serious in its commitment to step up regulatory oversight and address the shortcomings seems a no-brainer in terms of Thailand’s survival.
     The booming tourism sector in Thailand accounts for more than 15 percent of the Thai GDP, according to figures from Kasikornbank Thailand.
     A safer and more structured aviation system would not only help Thailand secure quick transportation of their important IT, perishables, and garment trade for Thai-registered airlines employing Thai nationals, thereby strengthening the Thai economy, but it would also draw more tourists and stimulate the country’s air cargo business.
     Stay tuned.
Ivar

     Over the last few weeks, a constant refrain in Indian aviation circles has been that within the next four-five years the country will become the third largest aviation market after the U.S. and China. Not without reason: Everyone has been quoting from a study done by KPMG and apex chambers of commerce body, FICCI (Federation of Indian Chambers of Commerce and Industry), called the “India Aviation Report.”      Released at the recent India Aviation 2016 in Hyderabad (this was the fifth edition of the exhibition and conference), the report pointed out that “India is the ninth largest civil aviation market in the world with a market size of $16 billion and aims to become the third largest market by 2020 and the largest by 2030. This is possible due to a host of factors, including increased competition, low-cost carriers, modern airports which are expanding, improved technology in both air side and city side operations, foreign direct investment (FDI), and increased emphasis on regional connectivity.” Those words must have sounded like music to the ears of those handling civil aviation in the country and, in fact, they were even better than International Air Transport Association’s forecast of India achieving the third rank by 2026.
     Predictions apart, the civil aviation leaders in the country do not have cargo on their radar. At Hyderabad, for example, a lonely B777 freighter from Etihad that attracted a lot of attention was on show.      What was, perhaps, worse was that no one in authority (incidentally, Indian President Shri Pranab Mukherjee inaugurated the show and Civil Aviation Minister Shri Ashok Gajapathi Raju Pusapati also spoke) touched on cargo in his or her speeches. Among the industry leaders there was Airbus’ India President Dr. Srinivasan Dwarkanath, who made a passing reference to cargo when he said “with an estimated 10 percent annual traffic growth rate over the next decade, India will require over 1,600 new passenger and freighter aircraft in the next ten years.”
     Boeing had also projected—though not at Hyderabad—a demand of 1,740 new airplanes over the next 20 years in India. While releasing the annual India Current Market Outlook (CMO) in August 2015, Dinesh Keskar, Senior Vice President of Asia Pacific and India Sales, Boeing Commercial Airplanes, had no figures on the number of freighters when he had said, “Over the next 20 years, Boeing forecasts India will need 1,740 new airplanes worth $240 billion. India’s economy and the country’s potential for air travel growth—both for leisure and business—continues to be strong and we remain confident in the Indian commercial aerospace market.”
     At present the country has only seven freighters for the seventh largest economy in the world and barring one, all are operated by courier and express major Blue Dart. Those at the helm of civil aviation in the country are obviously aware of the potential of the cargo market in the country and with the proliferation of e-commerce, the projected volumes have increased manifold. And, so have the problems. In fact, air cargo stakeholders have often talked about the hurdles faced by them.
     Today, with domestic cargo volumes growing by the day—largely due to ecommerce—the problems have multiplied. In fact, matters have come to such a pass that a number of stakeholders have raised the issues with the Minister of Civil Aviation as well as the top bureaucrat in the ministry, the Secretary of Civil Aviation. One of the top issues, for example, are the high airport royalty charges. Add to that ground handling and taxes on ATF and MRO, and the final figure is “unreasonably high.” The Airports Authority of India (AAI), which manages 125 airports of which 18 are international airports and 78 are domestic airports, for example, charges 13 percent of royalty from Indian MROs. Ground Handling (GH) royalty charges are as high as 36.3 percent in some airports. Similar charges and facilities offered by some of the important international airports abroad vis-à-vis Indian airport charges and facilities only emphasize the cost ineffectiveness of Indian airports.
     Privately operated Delhi Airport has been charging 20 percent on MRO services and 13 percent on Ground Handling services as royalty; the AAI-controlled Chennai International Airport’s royalty charges are 13 percent on MRO services and 36 percent on GH services.
     Though the AAI has started an incentive scheme for landing charges for freighters operated by airlines to and from Kolkata and Chennai airports—the incentives are as high as 30 percent for all international scheduled and non-scheduled cargo freighters depending on the number of flights—the scheme is only meant for international cargo operators.
     The American Chamber of Commerce in India (AmCham – India), an association of American business organizations operating in the country, sent out similar suggestions a few months ago as “priority issues to be taken up by the government.”
     “Air cargo operators are faced with a multitude of charges—royalty for ground handling services, royalty charges on security services, landing, and navigation charges, etc. These airport charges taken together have created an extremely high cost environment for cargo handling, which has substantially deterred their hub development,” the note said.
     Apparently, the elusive National Civil Aviation Policy (NCAP)—which is scheduled to make its appearance by the end of April—will have a lot of sops for the cargo sector. Air cargo stakeholders will know the level of interest the ministry of civil aviation has when the NCAP does come.
Tirthankar Ghosh

Vol. 15 No. 36
The Amazon Air Force
Chuckles For May 9, 2016
Namaste Nisha Mahajan
Cambodian Kingdom Of Wonders