Yet another airline goes out of business.

Topic: GS3 – Indian economy – Infrastructure, Industrial Policy and Investment.

PYQs on Airport Sector

1. Examine the developments of Airports in India through Joint Ventures under the Public-Private Partnership (PPP) model. What are the challenges faced by the authorities in this regard? (UPSC CSE (M) 2017)

Context:

• The insolvency declaration by the owners of Go First is a common occurrence in the Indian aviation industry, which significant shortcomings that have plagued it.

Issue:

• Another airline in India, Go First, has declared insolvency, leaving hundreds of passengers and employees stranded.
• The failures of airlines and their owners/promoters cannot be solely blamed for these incidents.
• The Ministry of Civil Aviation and DGCA should also be held accountable for severe deficiencies in safety, financial security, oversight audits, and inflated growth projections.

Distress in the Indian aviation sector:

• Several airlines in India, including Damania Airways, NEPC Airlines, Air Deccan, Air Sahara, Paramount, Kingfisher, and Jet Airways, have failed over the past 30 years.
• The financial world’s collapse in 2008 caused problems for major airlines. A representative from Boeing stated in 2009 that India had space for just three airlines, and mergers and consolidations would occur.

Problems that lead to failure:

• Crony capitalism in India has allowed favoured airlines to continue operating without being questioned, with banks pumping funds into non-performing assets.
• Delayed action: The DGCA, India’s aviation regulator, should act on deep financial stress indicators before their collapse. Both Kingfisher Airlines and Jet Airways airlines’ boards were loaded with former Ministry of Civil Aviation and DGCA officials.
• Poor financial records: Those setting up airlines in India announce grandiose plans without proven financial security and the minimum number of pilots, engineers, and cabin crew.
• False Projections: The DGCA’s Civil Aviation Requirement for Scheduled Transport Operations clearly states the minimum requirements for running an airline. Unfortunately, however, false projections and numbers continue to go unchecked.
• COVID-19: After the COVID-19 pandemic, every airline in India was in financial trouble, with areas such as training and safety taking a hit.

Need for and revamp of aviation policy:

• There is an urgent need for transparency and accountability in Indian aviation from airline owners, promoters, the Ministry of Civil Aviation, the DGCA, and the officials concerned.
• A complete revamp of India’s civil aviation policy is required, given the issues faced by Jet Airways 2.0, where people skimmed from the top and pulled the wool over the eyes of employees waiting for their dues.
• To prevent such occurrences, failed airline officials should be banned from holding managerial posts in another airline. Airlines should have a corpus fund to meet employee and passenger dues in case of closure.

Conclusion: The Indian aviation sector is essential for tourism and needs professional knowledge, and therefore must be re-energized with better reforms.

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The resilience of the services sector may be challenged as the demand from the global market decreases.

Topic: GS3 – Indian economy.

Context:

• The S&P Global Services PMI Business Activity Index for India in April 2023 was 62, the highest in 153 months.
• A reading above 50 indicates an expansion in activity levels relative to the previous month.

Issue:

• The services sector is a crucial driver of India’s output and job creation.
• Gross Value Added (GVA) growth from the industry slipped to 1%, while services’ GVA is expected to have grown 9.1% in 2022-23.
• Services exports are estimated to have hit a record $325 billion in 2022-23, reflecting growth of almost 28% over the previous year.
• The surge in new demand and output for domestic services, along with outbound deals, offers some comfort amid a strengthening global slowdown in major markets for India’s IT-dominated services exports.
• However, job creation has remained negligible, and input costs have resurged; neither augurs well for sustaining domestic demand, which has already taken a hit from high inflation.
• Services export growth could moderate going forward, as indicated by lower earnings guidance provided by IT companies and their extended dithering over onboarding young recruits.
  

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A boost for science, a broader window to the universe

Topic: GS3 – Science and technology.

Context:

• Establishing LIGO-India is a significant advancement for gravitational wave research and exemplifies the progress of science beyond national boundaries.

Issue:

• Gravitational waves are cosmic ripples in space-time created by colossal events such as black hole mergers and supernova explosions.
• LIGO (Laser Interferometer Gravitational-Wave Observatory) observed gravitational waves for the first time in 2015, expanding our understanding of the universe.
• LIGO-India is a groundbreaking collaboration between the US National Science Foundation and India’s Raja Ramanna Centre for Advanced Technology, fueled by a $320 million investment from India.
• LIGO uses lasers to detect ripples in space-time through a method called interferometry.
• LIGO has provided new clues about merging black holes, the existence of neutron stars, and the universe’s origin.
• LIGO-India will create new opportunities in Maharashtra’s Hingoli district and inspire the next generation of STEM leaders.
• By joining the global network, LIGO-India will push the boundaries of what science and technology can achieve and help unlock some of the universe’s greatest mysteries.
• LIGO-India is a collaboration between the LIGO Laboratory, India’s RRCAT, IPR, IUCAA, and DCSEM.
• The construction of LIGO-India is a significant milestone for gravitational wave science and the universal progress of science transcending borders.