The Bharatiya Vayuyan Vidheyak Bill: Indian Aviation Set to Soar Higher?

The Bharatiya Vayuyan Vidheyak Bill: Indian Aviation Set to Soar Higher?

By: Shreyasi Pal

India, currently the third-largest civil aviation market in the world, stands at the horizon of transformative growth and reforms. According to a report, as of June 2024, domestic passenger traffic surged to 81 million, marking a 5.6% increase, while international passenger traffic climbed to 18.54 million, reflecting a robust 14.2% growth. However, the sector faces challenges in maintaining a fair competitive market, with IndiGo dominating 60% of the market share. The merger of Air India and Vistara, the next largest players may offer a better level-playing field in the aviation industry.

Amidst this backdrop, the Bharatiya Vayuyan Vidheyak 2024 (“Bill”) emerges as a pivotal legislative initiative, aimed at regularizing the industry and fostering development. Coupled with schemes like UDAN and NABH-Nirman, which encourage enhanced connectivity and modernized infrastructure, the Bill has the potential to steer India's aviation sector towards a future of sustained growth and equity. Passed by the Lok Sabha (August 09, 2024) and Rajya Sabha (December 05, 2024) the Bill is set to replace the 90-year-old colonial Aircraft Act, 1934   (“Aircraft Act”).

 Maintenance, Repair, and Overhaul (MRO) Provisions

The Aviation Act is limited to manufacturing, operating and other sales-related provisions. However, the Bill also includes design and maintenance provisions over which regulations in the form of control, inspection, registration etc. also apply.
This is significant as India positions itself as a global aviation leader with a projected US$ 4 billion MRO industry by 2030. These additions highlight the Government's commitment to maintain robust regulatory standards amid increasing demands for MRO facilities and the same aligns with the visions of ‘Aatmanirbhar Bharat’.

License Procedure

As per Clause 11 (2) of the Bill, Radio Telephony Restricted (RTR) certification is brought under the control of the Directorate General of Civil Aviation (DGCA) from the Department of Telecommunications (DoT). RTR certification is a license needed for pilots in India to operate radio communication equipment on aircraft. It is essential for air traffic control communication. The RTR exam is one of the toughest in aviation, with many reports of corruption. This provision also extends to monetary transactions involved concerning licensing, and registration procedures to ensure fairness. The Central Government will also oversee every other licensing and registration procedure. This move aims to ensure a streamlined licensing procedure which will ultimately improve the productivity of aviation industry.

Key Issues

1. Disputes Resolution: As per Clause 22(b) of the Bill, the Government is empowered to appoint a qualified arbitrator unilaterally. In contrast, Section 11(2) of Arbitration and Conciliation Act, 1996 upholds the procedure as ‘arbitration-centric’, mentioning independence of parties to decide on a procedure to appoint their arbitrator. In 2019, the Supreme Court clarified the same in the case of Perkins Eastman Architects DPC and Ors. vs. HSCC (India) Ltd. [2019 INSC 1285].

2. Regulatory authority: The Central Government is empowered to scrutinise every action of DGCA, the Bureau of Civil Aviation Security (BCAS) and the Aircraft Accidents Investigation Bureau (AAIB). The Central Government has the authority to oversee and scrutinize every action of the Directorate General of Civil Aviation (DGCA), the Bureau of Civil Aviation Security (BCAS), and the Aircraft Accidents Investigation Bureau (AAIB). Under Clause 8, it can even take suo motu action in any aircraft-related matter.

Additionally, under Clause 9, the government has the power to review orders passed by regulatory bodies, ensuring accountability and oversight. Clause 10 grants the authority to make rules governing civil aviation, while Clause 12 allows it to frame rules for investigating aircraft accidents. Furthermore, Clause 19 empowers the Central Government to restrict, suspend, or cancel any license, certificate, or approval related to aviation.

3. Offences and Penalties: Though any investigation can be initiated by the cognizance by the regulatory bodies, the Central Government has the power to appoint officers to perform specific roles related to the enforcement of the Bill through an order.
Regulatory bodies are specialized and have sector-specific knowledge and expertise. While centralization in every aspect comes with a promise of uniformity and increased efficiency, many experts have cautioned that abuse of this provision may result in unnecessary encroachment on the independence of the concerned regulatory bodies due to political influence.
 For a growing industry, the legislation needs to address more important issues such as interests of potential investors, environmental concerns and the welfare of the workers of the aviation industry.

Attracting Public-Private Partnerships:

The latest dynamics hint towards a strong shift to increasing private players which raises hope of fairer competency and globalized standards of infrastructure and operations. Major airports in India have a significant privatised shareholding. Though supported by policymaking, provisions for the trend of liberalisation would have been a good move towards ensuring passenger rights, uniformity among competitors and empowerment of the regulatory bodies.

Environmental Concerns:

Alongside passenger traffic and revenue growth, the industry is also on its way to top the chart of sources of carbon emissions. A regulatory outline will ensure sustainability in growing business demands. Especially when the Bill has expanded its scope even in ‘designing’ aircraft, innovation can show the way to the world by curbing emissions.

High Operations Cost Management:

With MRO occupying the largest share of expenditure, the nuances of compliance, fuel costs and labour management have made cost-efficiency a challenge for the industry. Alongside policy regulations, the law can pave the way for financial sustainability by laying regulatory guidelines.

The Need for Specific Provision for Workers:

The landmark case of Air India vs. Nergesh Meerza and Ors. [1981 INSC 152] inter-alia, underlined the need for a specialized legislative framework balancing the needs of the aviation industry with the rights of the workers. In light of the fact that the aviation sector is a labour-intensive industry and has faced several labour disputes and issues pertaining to gender discrimination over the years, the legislators again missed a golden opportunity to make provisions for the same.

Conclusion:
The Indian aviation sector is a promising sector in terms of expansion, better regulation, improved passenger experience and regional connectivity. The Bill, if supported with the right policy measures, has the potential to drive inclusive growth in the aviation sector. With the government approving the Protection and Enforcement of Interests in Aircraft Objects Bill, 2024, which seeks to enhance lessor confidence by lowering costs and prioritizing the provisions of the Cape Town Convention, the bill aims to strike the right balance between flexibility and innovation.