Industrial
Promotion Policies - Central Government
Domestic Air Transport
Policy
Introduction
On 28th May 1953 - with the enactment
of the Air Corporations Act, 1953 - Government of India
nationalised the airline industry. In accordance with
this Act, two air corporations, viz. Indian Airlines
Corporation and Air India International, were established
and the assets of all the then existing air companies
(nine) were transferred to the two new Corporations.
The operation of scheduled air transport services was
made a monopoly of these two Corporations and the Act
prohibited any other person or their associates from
operating any scheduled air transport services from/
to/ or across India.
However, on March 1, 1994 the Air
Corporation Act, 1953 was repealed thereby ending the
monopoly of the Corporations on scheduled air transport
services. While the domestic air transport services
were liberalised and private operators were permitted
to provide scheduled air transport services, the Government
has laid down a policy framework to ensure safety and
security of operations as well as the orderly growth
of air transport services keeping in view the infrastructure
constraints at a number of airports.
Policy Guidelines for Starting Scheduled/
Non-Scheduled Air Transport Services
Categories of Air Transport Services
Scheduled Air Transport Service:
Scheduled Air Transport Service means an air transport
service undertaken between the two or more places and
operated according to a published time table or with
flights so regular or frequent that they constitute
a recognisably systematic series, each flight being
open to use by members of the public.
Requirements to become Scheduled Air Transport Operators
are given at ANNEXURE-
I
Non-Scheduled Services:
Non-Scheduled Operation means an air transport service
other than scheduled air transport service and that
may be on charter basis and/or non-scheduled basis.
The operator is not permitted to publish time schedule
and issue tickets to passengers.
Requirements for becoming Non-Scheduled Operator are
at ANNEXURE-II.
Air Cargo Services:
An air cargo service means air transportation of cargo
and mail. Passengers are not permitted to be on these
operations. It may be on scheduled or non-scheduled
basis. These operations are to destinations within India.
For operations outside India, the operator has to take
specific permission of DGCA demonstrating his capacity
for conducting such operations.
Requirements for becoming an Air Cargo Operator are
at ANNEXURE-III.
Foreign Equity
Participation in Air Transport Services
Foreign equity up to 49% and NRI investment up to
100% is permissible in the domestic air transport
services through the automatic route;
Equity from foreign airlines is not allowed, directly
or indirectly, in the domestic air transport services.
The details on foreign equity participation are at
ANNEXURE - IV
Procedure for Starting Scheduled/Non-Scheduled
Air Transport Services
An Aircraft Acquisition Committee (AAC) considers proposals
for grant of permission to operate scheduled/non-scheduled
air transport services. The present composition of the
Committee is:
Joint Secretary, Ministry of Civil Aviation - Convenor
Financial Advisor, Ministry of Civil Aviation -
Member
Chairman, Airports Authority India - Member
Director General of Civil Aviation - Member
Commissioner of Civil Aviation Security, Bureau
of Civil Aviation Security - Member
The three-stage clearance procedure laid down for starting
Air Transport Services is as under:
(1) Issue of NOC for Scheduled/ Non-Scheduled services
- The competence and viability of the company to operate
safe and reliable air transport service is considered
at this stage.
(2) Import permission for aircraft - The details of
specific types of aircraft, their airworthiness, seating
capacity, mode of acquisition and arrangements of security
programme, training facilities for crew and engineers,
Operations Manual, maintenance facilities, etc. are
looked into by the Committee.
(3) Issue of permit for Scheduled/Non-Scheduled air
services - Permit is issued by DGCA after completion
of all requirements laid down in the regulations/guidelines.
Applications for NOC to operate scheduled/ non-scheduled
air services as well as for import of aircraft (by
all operators) are required to be submitted by applicants
in the prescribed forms.
On receipt, the applications are scrutinised in
the DT (Domestic Transport) Section of the Ministry
for any, prima-facie, deficiency.
After the application is found complete in all respects,
it is circulated to the Members of the Committee for
comments.
The applications are considered in the meeting of
the Committee, which is usually held on a monthly
basis.
The Committee is empowered to decide all applications
for issue of NOC for non-scheduled services and for
import of aircraft by both scheduled/non-scheduled
operators. In case of NOC for scheduled services,
the recommendations of the Committee are submitted
to the Secretary (Civil Aviation) for approval.
The final decision is, thereafter, communicated
to the applicant by the Ministry/ DGCA.
NOC holder for Scheduled/Non-Scheduled Operations
is given permit by DGCA after completion of all requirements
laid down in the guidelines / instructions.
With a view to achieving better regulation of air
transport services and taking into account the need
for air transport services of different regions in
the country, the Government vide order dated 1.3.94
have laid down Route Dispersal Guidelines.
According to these guidelines, all scheduled operators
are required to deploy in the North Eastern region,
Jammu & Kashmir, Andaman & Nicobar Islands
and Lakshadweep (Category-II routes) at least 10%
of their deployed capacity on trunk routes (Category-I
routes). Further, at least 10% of the capacity thus
required to be deployed on Category-II routes, is
required to be deployed for connectivity exclusively
within these regions.
50% of the capacity deployed on Category-I routes
is to be deployed on routes other than Category-I
and Category-II routes i.e. Category-III routes.
All airlines are free to operate anywhere in the
country subject to compliance with the Route Dispersal
Guidelines.
The detailed Route Dispersal Guidelines are at ANNEXURE
V.
Import of Aircraft for Private Use
The application for import/acquisition of aircraft
for private use is required to be submitted to the Director
General Civil Aviation in the prescribed performa (Annexure
VI ) giving details of applicant, details of existing
as well as proposed aircraft its maintenance arrangement,
details of crew/engineers etc. The applications are
considered by the Aircraft Acquisition Committee (AAC)
with safety and security point of view and thereafter
recommended by Director General Civil Aviation for permission
to DGFT.
1. It is registered and has its principal place of
business within India;
2. The Chairman and at least two-thirds of its Directors
are citizens of India; and
3. Its substantial ownership and effective control
is vested in Indian nationals.
A fleet of minimum five aircraft of all-up-weight
of aircraft more than 5,700 kgs. each to be acquired
in one years' time from the date of securing operators'
permit, if they meet airworthiness, air safety and
operational requirements for such operation, fulfil
the routes dispersal guidelines and all other requirements
of a scheduled operator.
Not less than Rs.30 crores subscribed equity capital
in respect of operators having aircraft or all-up-weight
exceeding 40,000 kgs. and not less than Rs.10 crores
for operators having aircraft of all-up-weight not
exceeding 40,000 kgs.
Not less than three sets of flight crew and cabin
crew per aircraft.
An approved maintenance organization and facilities
to carry out maintenance of aircraft upto 500 hours
inspection or Check 'B' for Boeing 737 aircraft.
Approval manuals for operations, training and quality
control-cum-maintenance.
Cells for pre-flight medical examination of crew,
flight planning and dispatch, reliability analysis
of aircraft components & systems, defect investigation,
compliance of service bulletins & modifications
and records of major components.
Security programme approved by Bureau of Civil Aviation
Security and trained security personnel at all operating
stations.
Scheduled operators of trunk routes are required
to provide certain minimum capacity on various routes
including North-Eastern region, Jammu & Kashmir,
Andaman & Nicobar and Lakshadweep in accordance
with the Route Dispersal Guidelines issued in this
behalf (Annexure-V).
The NOC for operating air transport services is
valid for one year. Extension in validity of NOC is
granted up to a period of 6 months on merits of each
case. These period related restrictions apply in respect
of dry lease and outright purchase of aircraft as
well. However, when the aircraft proposed to be imported
is a new one with a definite delivery schedule, extension
of NOC is allowed for the actual lead time of delivery,
even if it exceeds the total period of one and half
year.
The import/acquisition of old aircraft is generally
permitted subject to following age related restrictions:
Pressurized aircraft not to exceed 15 years
of age or 75% of its designated economic cycles
or 45,000 pressurization cycles, whichever is
less;
Unpressurized aircraft normally not to be more
than 20 years of age;
Scheduled Operator's Permit shall not be transferable.
A Scheduled Operator's shall be renewable every
year.
ANNEXURE-II
Requirements for Non-Scheduled Operator:
A Non-Scheduled Operator's permit can be granted
to:-
Citizen of India; or
A Non-Resident Indian (NRI); or
A Company, registered under the Companies Act,
1956 having its principal place of business within
India and with or without foreign equity participation
(excluding NRI equity) limited to 49%; or
The Central Government or State Government or
an Undertaking owned or controlled by either of
the said Governments.
Before issue of the permit, an applicant should
be in possession of a multi engine fixed wing aircraft
and single or multiple engine helicopter either by
outright purchase or through lease and should be registered
in Indian under the normal passenger category.
An applicant should either have his own maintenance
and repair facilities approved by the DGCA or should
furnish proof of availability of such facilities and
flight crew members and aircraft maintenance engineers
duly licensed by DGCA.
An applicant should conduct operations from approved
operational and maintenance bases and should abide
by the prescribed operational requirements.
An applicant should get their security programme
approved by Bureau of Civil Aviation Security before
grant of permit.
The validity of NOC for operating air transport
services is for one year. Extension of validity of
NOC is granted up to a period of 6 months on merits
of each case. These period related restrictions apply
in respect of dry lease and outright purchase of aircraft
as well. However, when the aircraft proposed to be
imported is a new one with a definite delivery schedule,
extension of NOC is allowed for the actual lead time
of delivery, even if it exceeds the total period of
one and half year.
The import/acquisition of old aircraft is generally
permitted subject to following age related restrictions:
Pressurized aircraft not to exceed 15 years
of age or 75% of its designated economic cycles
or 45,000 pressurization cycles, whichever is
less;
Unpressurized aircraft normally not to be more
than 20 years of age;
Non-Scheduled Operator's Permit is renewable every
year against payment of a fee of Rs.5,000/-.
A Non-Scheduled Operator's Permit is not transferable.
Detailed requirements are specified in Civil Aviation
Requirements (CAR)
Section 3 Air Transport Series ‘C’ Part III
dated 8th October 1999 and A Non-Scheduled Operator's
permit can be granted to:-
Citizen of India; or
A Non-Resident Indian (NRI); or
A Company, registered under the Companies Act,
1956 having its principal place of business within
India and with or without foreign equity participation
(excluding NRI equity) limited to 49%; or
The Central Government or State Government or
an Undertaking owned or controlled by either of
the said Governments.
Before issue of the permit, an applicant should
be in possession of a multi engine fixed wing aircraft
and single or multiple engine helicopter either by
outright purchase or through lease and should be registered
in Indian under the normal passenger category.
An applicant should either have his own maintenance
and repair facilities approved by the DGCA or should
furnish proof of availability of such facilities and
flight crew members and aircraft maintenance engineers
duly licensed by DGCA.
An applicant should conduct operations from approved
operational and maintenance bases and should abide
by the prescribed operational requirements.
An applicant should get their security programme
approved by Bureau of Civil Aviation Security before
grant of permit.
The validity of NOC for operating air transport
services is for one year. Extension of validity of
NOC is granted up to a period of 6 months on merits
of each case. These period related restrictions apply
in respect of dry lease and outright purchase of aircraft
as well. However, when the aircraft proposed to be
imported is a new one with a definite delivery schedule,
extension of NOC is allowed for the actual lead time
of delivery, even if it exceeds the total period of
one and half year.
The import/acquisition of old aircraft is generally
permitted subject to following age related restrictions:
Pressurized aircraft not to exceed 15 years
of age or 75% of its designated economic cycles
or 45,000 pressurization cycles, whichever is
less;
Unpressurized aircraft normally not to be more
than 20 years of age;
Non-Scheduled Operator's Permit is renewable every
year against payment of a fee of Rs.5,000/-
A Non-Scheduled Operator's Permit is not transferable.
Detailed requirements are specified in Civil Aviation
Requirements (CAR)
An Air Cargo Operator's (ACO) Permit can be granted
to:-
1. Citizen of India; or
2. A Non-Resident Indian (NRI); or
3. A Company, registered under the Companies Act, 1956
having its principal place of business within India
and with or without foreign equity participation (excluding
NRI equity) limited to 49%; or
4. The Central Government or State Government or an
Undertaking owned or controlled by either of the said
Governments.
Air Cargo Operations shall be carriers of cargo,
mail. Passengers are not permissible in cargo operations.
It can be scheduled or non-scheduled operations.
Operations would be to destinations within India.
For operations outside India, specific permission
of the DGCA would be necessary demonstrating capability
for conducting such operations.
Before issue of Air Cargo Operators' Permit, an
applicant should be in possession of an aircraft with
Certificate of Airworthiness in Normal Goods category.
An applicant should either have his own maintenance
and repair facilities approved by the DGCA or should
furnish proof of availability of such facilities and
flight crew members and aircraft maintenance engineers
duly licensed by DGCA.
An applicant should conduct operations from approved
operational and maintenance bases and should abide
by the prescribed operational requirements.
An applicant should get the security programme approved
by Bureau of Civil Aviation Security before grant
of ACO permit.
The NOC for operating air transport services is
valid for one year. Extension of validity of NOC is
granted up to a period of 6 months on merits of each
case. These period related restrictions apply in respect
of dry lease and outright purchase of aircraft as
well. However, when the aircraft proposed to be imported
is a new one with a definite delivery schedule, extension
of NOC is allowed for the actual lead time of delivery,
even if it exceeds the total period of one and half
year.
Air Cargo Operators' Permit is renewable every year.
An Air Cargo Operators' Permit is not transferable.
ANNEXURE
- IV Guidelines for Foreign Equity Participation
in the Domestic Air Transport Sector
The Domestic Air Transport Policy approved by the government
provides for foreign equity participation up to 49%
and investment by Non-Resident Indians (NRIs) up to
100% in the domestic air transport services. Foreign
airlines are, however, not permitted to pick up equity
directly or indirectly.
Permission to operate scheduled services will be
granted either:-
to a citizen of India; or
to a company or a body corporate provided that;
a. It is registered and has its principal place
of business within India;
b. Its Chairman and at least two-thirds of its
Directors are citizens of India; and
c. Its substantial ownership and effective control
is vested in Indian nationals.
Foreign Financial Institutions and other entities
that seek to hold equity in the domestic air transport
sector shall not have foreign airlines as their shareholders.
An applicant shall be required to furnish full and
detailed information with regard to the shareholding
of any airline in the foreign investing institution/entity,
if any, and composition of the Board of Directors
and senior management of the said foreign investing
institution/entity.
An applicant who seeks permission to operate air
transport services in the domestic sector shall be
required to give a declaration that no foreign airline
is in financial or commercial tie up with him or has
the management/ownership interest in him.
While the foreign investing institution/entity,
which seeks to hold equity in the domestic air transport
sector, may have representation on the Board of Directors
of the Company, such representation shall not exceed
1/3rd of the total.
Any Foreign Financial Institution/entity, which
seeks to make investment in the domestic air transport
sector, shall not be a subsidiary of a foreign airline.
A leasing company leasing aircraft to an operator
in the domestic air transport sector shall also not
be a part of an airline. However, wet leasing of an
aircraft may be allowed from any source subject to
the fulfilment of the guidelines issued by the Government/DGCA.
A domestic sector air transport operator shall not
have agreements such as shareholders agreements etc.
with a foreign airline, containing provisions/arrangements
empowering such foreign airlines or others on their
behalf to have effective control in the management
of the domestic airline.
A domestic air transport operator shall not enter
into an agreement with a foreign airline, which may
give such foreign airline the right to interfere in
the management of the domestic operator.
A domestic air transport operator may enter into
financial arrangements with a bank and/or other financial
institutions for the purpose of lease finance, hire
purchase or other loan arrangements, but such a tie
up shall not be permitted with a foreign airline.
Management contract with a foreign airline shall
also not be permitted to a domestic air transport
sector operator.
Marketing arrangements such as ground handling,
general sales agency, code sharing, interlining will,
however, be permitted.
A domestic air transport sector operator will also
be permitted to get maintenance, overhaul, repair
works done and training of pilots/engineers conducted
either at the facilities available with other airlines
or those certified by the Director General of Civil
Aviation on such terms as may be prescribed.
A domestic air transport sector operator may be
permitted to employ foreign pilots/engineers till
he is able to train his own manpower. This shall,
however, be permitted with the express approval of
the competent authority and for such period and terms
as may be prescribed by the said authority.
An applicant who seeks permission for domestic air
transport operations will be required to give a declaration
that he fulfils all the requirements mentioned in
the above guidelines and in case of any change, he
shall notify the competent authority within one month
of such change. In addition, the applicant will be
required to furnish such a declaration every year.
A domestic air transport operator, who furnishes
wrong information in respect of any of the above prescribed
guidelines at any stage, shall be liable for suspension/cancellation
of his operating permit.
Route Dispersal Guidelines Provision
of Service in Different Categories of Routes
Category-I
Routes connecting directly
Mumbai-Bangalore
Calcutta-Delhi
Mumbai-Calcutta
Calcutta-Bangalore
Mumbai-Delhi
Calcutta-Chennai
Mumbai-Hyderabad
Delhi-Bangalore
Mumbai-Madras
Delhi-Hyderabad
Mumbai-Trivandrum
Delhi-Chennai
Category-II
Routes connecting stations in North Eastern region,
Jammu & Kashmir, Andaman & Nicobar and Lakshadweep.
Category-III
Routes other than those in Category-I and Category-II
Any one who operates schedule air transport service
on one or more of the routes under Category-I, shall
be required to provide such service in Categories-II
& III as indicated below:
The operator will deploy on routes in Category-II at
least 10% of the capacity he deploys on routes in Category-I
and of the capacity thus required to be deployed on
Category-II routes, at least 10% would be deployed on
service or segments thereof operated exclusively within
the North-Eastern region, Jammu & Kashmir, Andaman
& Nicobar and Lakshadweep.
The operator will deploy on routes in Category-III, at
least 50% of the capacity he deploys on routes in Category-I.
Note 1: A service operated on a Category-I route as a
part of international air service will not be reckoned
for the above purpose.
Note 2: Capacity deployed will be reckoned in Available
Seat Kilometres (ASKM).
Note 3: On multiple sector routes like Delhi-Calcutta-Guwahati-Imphal,
the capacity provided on Delhi-Calcutta sector will
count towards Category-I that provided on Calcutta-Guwahati
sector will count towards Category-II and the capacity
on Guwahati-Imphal sector will count towards service
exclusively within Category-II.
Note 4: In addition to the routes identified as Category
IIA in the aforesaid Ministry of Civil Aviation Order,
the operations on Cochin-Agatti-Cochin route shall also
be counted within the classification of Category IIA
routes.
Application for Import/Acquisition of Aircraft for
Private Use
Part I general Information
1. Name and address of the Applicant
2. Name(s) of Directors of the firm/Company
3. Existing fleet strength, type-wise and their seating
capacity
4. (a) Aircraft type, number configuration and other
technical details in respect of the aircraft proposed
to be imported/acquired (Details of the aircraft proposed
to be imported/acquired to be furnished as per format
given below in part II)
(b) Maintenance and operational base of the proposed
aircraft.
5. Source of crew and their names
(a) for existing fleet
(b) for proposed fleet
6. Arrangement for training of crew
7. Source of engineers/technical staff and their names
(a) for existing fleet
(b) for proposed fleet
8. Arrangement/level of readiness for maintenance of
aircraft
Part II Details of the Aircraft
a) Type and Make of the aircraft:
b) Nationality and Registration of the aircraft:
c) Year of manufacture of the aircraft:
d) Name of manufacturer of the aircraft:
e) Serial number of the aircraft:
f) No. of passenger seats/weight of cargo permissible
as per type certificate of the aircraft/helicopter
g) Maximum certified take off mass:
h) Engine type mounted on aircraft:
i) Number of hours flown since new:
j) Number of landing since new:
k) Number of pressurisation cycles since new:
l) Last major check done and number of hours since flown:
m) Next major check due:
n) Name of the company from which the aircraft/helicopter
is being taken on lease:
o) Previous history of aircraft with details of any
incident/accident involving structural damage:
p) Name of the Authority and country which issued the
last Certificate of Airworthiness:
Undertaking
It is confirmed that the aircraft after registration
in India shall be maintained, operated and de-registered
(if required) in accordance with the Indian rules, regulations,
procedures and any condition specified by DGCA, India
and there is no binding or limitation of any kind in
this regard in the lease agreement for the acquisition
of the aircraft.
