AirAsia’s proposal to set up a domestic airline in India along with the Tatas and and Arun Bhatia of Telestra Tradeplace Pvt. Ltd could run into some delays, if not problems.
Sources indicated that while the proposal could get an “in-principle” nod from the Foreign Investment Promotion Board (FIPB) when it meets here on March 6, the airline will still need to pass the scrutiny of the Ministry of Civil Aviation before it can take to the skies.
The new airline will have to apply for an initial no-objection certificate from the Directorate General of Civil Aviation (DGCA) in which it will have to give the details of the routes that it plans to operate, how many aircraft it plans to operate and also start the process of getting its aircraft and airport manuals ready for approval by the authorities. The airline will also have to seek an Air Operators Certificate from the DGCA before it is allowed to take off.
Further, the airline will also need to get its aircraft acquisition plan cleared by the Aircraft Acquisition Committee of the Ministry of Civil Aviation. This Committee is headed by an Additional Secretary while the Minister for Civil Aviation is the approving authority.
These clearances are required since AirAsia is going to start a new airline. However, if foreign direct investment flows into an existing airline the only permission that it will require will be for importing aircraft.
Hence, if the Jet-Etihad deal goes through, the two airlines will not need these permissions as Jet already flies in India and abroad.
Sections in the Ministry of Civil Aviation feel that foreign direct investment was allowed in domestic airlines primarily to give a new lease of life to financially stretched domestic airlines rather than having another player come and add more capacity into the market.
This is likely to complicate AirAsia’s entry as this is the first proposal for starting a new airline that is being taken up for consideration and approval by the Government.
In fact, this is also the first proposal that is being taken up by the Government after it allowed foreign airlines to acquire a stake of up to 49 per cent in a domestic airline.
Ahead of the FIPB meeting, Ratan Tata Chairman Emeritus, Tata Sons, met Ajit Singh, Civil Aviation Minister, here.
http://www.thehindubusinessline.com/industry-and-economy/logistics/airasias-proposal-for-domestic-airline-could-be-delayed/article4466103.ece
Sources indicated that while the proposal could get an “in-principle” nod from the Foreign Investment Promotion Board (FIPB) when it meets here on March 6, the airline will still need to pass the scrutiny of the Ministry of Civil Aviation before it can take to the skies.
The new airline will have to apply for an initial no-objection certificate from the Directorate General of Civil Aviation (DGCA) in which it will have to give the details of the routes that it plans to operate, how many aircraft it plans to operate and also start the process of getting its aircraft and airport manuals ready for approval by the authorities. The airline will also have to seek an Air Operators Certificate from the DGCA before it is allowed to take off.
Further, the airline will also need to get its aircraft acquisition plan cleared by the Aircraft Acquisition Committee of the Ministry of Civil Aviation. This Committee is headed by an Additional Secretary while the Minister for Civil Aviation is the approving authority.
These clearances are required since AirAsia is going to start a new airline. However, if foreign direct investment flows into an existing airline the only permission that it will require will be for importing aircraft.
Hence, if the Jet-Etihad deal goes through, the two airlines will not need these permissions as Jet already flies in India and abroad.
Sections in the Ministry of Civil Aviation feel that foreign direct investment was allowed in domestic airlines primarily to give a new lease of life to financially stretched domestic airlines rather than having another player come and add more capacity into the market.
This is likely to complicate AirAsia’s entry as this is the first proposal for starting a new airline that is being taken up for consideration and approval by the Government.
In fact, this is also the first proposal that is being taken up by the Government after it allowed foreign airlines to acquire a stake of up to 49 per cent in a domestic airline.
Ahead of the FIPB meeting, Ratan Tata Chairman Emeritus, Tata Sons, met Ajit Singh, Civil Aviation Minister, here.
http://www.thehindubusinessline.com/industry-and-economy/logistics/airasias-proposal-for-domestic-airline-could-be-delayed/article4466103.ece
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