India's government said it expected to resolve by March all concerns
raised by the U.S. Federal Aviation Administration, including
appointing an adequate number of flight operation inspectors, and
would approach the U.S. regulator for a review of its decision.
"The FAA has determined that India at this time is not in compliance
with the international standards for aviation safety oversight," the
U.S. regulator told India in a communication, extracts of which were
released by the Indian aviation ministry.
Jet Airways <JET.NS> and state-run Air India <AIN.UL>, the only two
carriers that fly from India to the United States, would be hit by
the downgrade. Air India has 21 weekly flights between India and the
United States, while Jet has seven.
After the news, Jet Airways shares closed 3.7 percent lower in a
Mumbai market that ended 0.3 percent higher.
"It's very disappointing and also surprising," Indian Aviation
Minister Ajit Singh told a news briefing on Friday after the FAA
told Indian authorities that it was downgrading the country to
Category 2 from Category 1.
"In our view, 95 percent of all the issues raised have been solved,"
Singh said, adding they would address all of the FAA's concerns by
India joins countries such as Indonesia, the Philippines and
Bangladesh that have a Category 2 rating. As of November 22, the FAA
kept 81 of the 96 countries reviewed in Category 1.
Amber Dubey, head of aerospace and defense at consultancy KPMG's
Indian unit, said safety regulators in some other countries may
follow suit after the FAA downgrade, which would then affect
carriers like IndiGo and SpiceJet <SPJT.BO>, which fly to Asian and
Middle Eastern countries.
"FAA's downgrade typically has a domino effect," Dubey said.
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.
Transport Canada said Air India and Jet Airways continue to hold
certificates to fly to Canada. The Canadian regulator verifies
airlines comply with its own and international standards, and can
suspend permission if violations are found.
Airlines from countries rated Category 2 can continue operations at
current levels under "heightened FAA surveillance" but cannot expand
or change services to the United States, as per rules of the FAA's
International Aviation Safety Assessments program.
[to top of second column]
State-run Air India currently does not have any plan to increase
flights between India and the United States, Prabhat Kumar, head of
India's aviation regulatory body, told reporters.
Jet Airways, which last year sold a 24 percent stake to Abu Dhabi's
Etihad and is expanding its international flights, did not reply to
an email seeking a comment.
The FAA, which periodically reviews air safety preparedness of
different countries, audited the Indian aviation regulator in
September and December last year and had raised issues including
lack of adequate number of flight inspection safety officers and
training of officers who certify a plane is airworthy.
India earlier this week approved appointing 75 officers in a bid to
avert a downgrade and said it had addressed 29 of the 31 issues
raised by the FAA's safety audit.
U.S. State Department spokeswoman Marie Harf said the United States
and India were committed to restoring India to a Category 1 rating
as soon as possible and an FAA team was in India in part to discuss
how to go about doing that.
She said the decision had been a regulatory one based on standards
of the U.N.'s International Civil Aviation Organization and had
nothing to do with a dispute that blew up between the United States
and India last year which led to the effective expulsion of an
Indian diplomat accused of visa fraud and underpaying her maid.
"This was a regulatory decision," Harf told a regular news briefing.
"I don't know how much leeway we have in those, but it's my
understanding that this was all made inside a regulatory framework
that has very specific criteria countries have to meet under ICAO
standards that we're all party to.
"These aren't our standards. They're the ICAO standards everyone has
to live under. And we're committed to working with India to help
them get back to a Category One rating."
(Additional reporting by Maria Sheahan
in Frankfurt, David Brunnstrom in Washington and Solarina Ho in
Toronto; editing by David Evans, James Dalgleish and Amanda Kwan)
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