DGCA to begin checkup of SpiceJet's financial health, report by Sept

Now that SpiceJet has finished with its process of declaring its quarterly results, it will have to submit details of dues to various creditors to aviation regulator DGCA. The regulator has set a deadline of 31 August for completing an engineering audit of the airline and a report by its three-member team is expected by the first week of September.

Official sources told Firstbiz that though questions about dues to various creditors had been asked a while back, SpiceJet had sought time to revert with required details since it was preparing to declare its first quarter results. The results were out on 14 August and now, a three member DGCA team will begin an engineering audit of the airline.

“We have a deadline of 31 August by when the engineering audit of SpiceJet should be over. Our inspectors will examine their aircraft, situation of spare parts etc and qualification of their engineers and a report is expected by the first week of September,” these sources said.

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Besides, DGCA will also look into financial details such as what the carrier owes to its various creditors - airports, oil marketing companies and tax departments. The “engineering audit” had been ordered after a flight of SpiceJet got delayed by four and a half hours in June. The regulator wants to know whether SpiceJet is in the right financial condition required to run and maintain an airline.

In fact, some recent incidents of aircraft plunging by thousands of feet without pilots noticing and flight delays due to inexplicable technical faults in the aircraft have prompted DGCA to begin an exhaustive and periodic safety of audit of all airlines.

Sources said that every month, some scheduled and some non-scheduled airlines will be identified for audits so that “they remain on their toes”.

These audits come when a spate of incidents have shocked the domestic aviation industry. While the first incident happened on a Jet Airways flight which plunged 5,000 feet without either the pilot or co-pilot noticing, the second instance was noticed for a SpiceJet aircraft that was delayed for close to five hours. The regulator has already fired the training chief and a dozen pilots of GoAir because it found discrepancies in the airline’s internal training schedules.

A “training audit” has been ordered for both, Jet Airways and GoAir. Sources say this audit will examine whether there are adequate training facilities at both the airlines, if training staff complies with DGCA norms in its qualifications and what exactly happened in the Jet Airways’ incident.

In the case of GoAir, routine checks revealed that the airline was not following mandated and periodic training procedures. Sources said the GoAir CEO Georgio Di Roni had met DGCA officials to explain the situation and requested that the airline’s training chief be reinstated (he had been suspended by the regulator) but his request was not granted.

An earlier exercise of a detailed financial audit of all airlines remains in limbo though as the regulator awaits details from some carriers. Till June this year, a total of 14 aircraft were grounded by the DGCA, which conducted 55 surprise special surveillance checks as part of its oversight activity to ensure strict compliance of safety regulations. About 2,400 surveillance audits and 20 regulatory audits have been planned under annual surveillance programme this year.