India’s Directorate General of Civil Aviation (DCGA) has demanded all carriers to submit their financial statements by the deadline next week or face the cancellation of their aviation licences. The request is part of a program to ensure that loss-making carriers maintain standards in relation to safety and is not intended to be a financial audit.

The DGCA has raised concerns that airlines that have reported financial losses will compromise on safety due to a lack of funding, particularly following the recent escalation of competitive pricing within a so-called ‘airfare war’.

Notices have been issued to major Indian carriers, such as Air India (AI) and Jet Airways in addition to the low-cost carriers GoAir, SpiceJet and the only profit-making carrier, IndiGo.

An official representative from the DGCA said, “Many Indian carriers have ordered new planes, which we believe does not match with their financial performance. We also need to see how much is spent against different heads, on safety, engineering, infrastructure, salaries and other mandatory requirements. We just cannot take any chance now. We will be presenting our case to USFAA. We have to prove that we have put in some best practices.”

Civil Aviation Secretary, Ashok Lavasa said, “We keep giving directions to the DGCA. They have to ensure they do it in compliance with the law.”