Under pressure from the airline industry and in the face of criticism about delays in inducting new aircraft, the Civil Aviation Ministry has disbanded the Aircraft Acquisition Committee.
The six-member AAC, headed by the Additional Secretary in the Ministry, was vested with the power of clearing aircraft purchases for existing airlines as well as deciding on proposals for those wanting to enter the domestic industry. The newly constituted AAC was set up on October 31 last year.
Now, aircraft import requests will be processed “administratively” by the Ministry. A request for aircraft import is likely to be denied only on grounds of safety and other regulatory compliance, Ministry sources said.
The move is expected to facilitate setting up of new airlines and import of aircraft by airlines, private aircraft operators and institutes that offer flying training.
The AAC has been mired in controversy with allegations early this year that it was delaying the import of aircraft that which domestic airlines like IndiGo planned to induct.
The move could facilitate starting of operations by airlines like AirAsia, which has tied up with Tata Sons and Telestra Tradeplace. The joint-venture company will still have to approach the Ministry of Civil Aviation for an initial No-Objection Certificate for starting an airline.
But unlike in earlier times, now the Domestic Transport (DT) Department in the Ministry of Civil Aviation will receive and process applications for new airlines.
“The DT department is a permanent part of the Government and will receive and process the application in normal course of its work. This will cut down the time taken to give clearance for a new airline,” a senior official of the Ministry of Civil Aviation said.
For import or replacement of aircraft, airlines will have to go to the Directorate-General of Civil Aviation rather than first seeking clearance from the AAC and then approaching the aviation regulator.
Ministry officials said that the five existing scheduled airlines, including Jet Airways, IndiGo, SpiceJet and Air India, will still need to get an initial NoC for acquiring an aircraft as this was a requirement of the Reserve Bank of India. Officials indicated that no proposal for aircraft import is likely to be rejected on the grounds that it could lead to over capacity in the domestic market. This was one of the reasons put forward for not allowing airlines like IndiGo to import more aircraft.
Terming the decision as “progressive,” IndiGo President Aditya Ghosh said it was a “significant step towards unleashing the true potential of aviation in India whereby the demand-supply anomaly may be addressed over time and millions more may be able to fly one day at lower fares.”
Welcoming the decision, Amber Dubey, Partner and Head, Aviation, KPMG, felt that airlines were mature enough to decide on issues of aircraft import.