Easier aircraft import norms: validity expires in five years.

New Delhi: The aviation ministry has introduced a five-year cap on the in-principle approval it will grant to Indian airlines to import aircraft in future into the country.

Earlier this month the ministry had announced it was relaxing norms to import aircraft by Indian carriers but in an internal order reviewed by Mint the ministry has added a new caveat.

“In-principle approval for import of aircraft by scheduled operators, including regional scheduled operators, will be granted by the ministry. This approval shall be valid for a maximum period of five years,” the ministry wrote in the 25 March order issued with the approval of aviation minister Ajit Singh.

India’s scheduled airlines had 390 planes in their fleets as of December, according to data submitted to Parliament, besides hundreds on order.

IndiGo has an in-principle approval for the purchase of 220 Airbus aircraft from the aviation ministry, while GoAir has this for at least 70 planes that are meant to be imported over the next one decade. Jet Airways (India) Ltd and the now grounded Kingfisher Airlines Ltd also have aircraft orders on their books.

These approvals were granted by the aviation ministry in the last decade and there was no deadline by which the last aircraft could be inducted. IndiGo’s aircraft orders extend until 2026. Airlines get discounts from manufacturers such as Boeing and Airbus if they place big orders.

The new ministry order applies to new airlines planning to order planes and makes it imperative that the order be for the next five years only, said a civil aviation ministry official who declined to be named.
“It becomes very unwieldy,” said a ministry official on allowing airlines to place large orders. “Airlines can now plan for the next five years and again come back for approvals.”

The rule will not apply retrospectively, which means the orders by IndiGo, GoAir, Jet that have already been approved won’t be subject to the limit unless they seek orders afresh.

Malaysia-based AirAsia Bhd, with 475 aircraft on its order books, will need to take the aviation ministry’s in-principle approval to bring aircraft into India for the next five years when it applies for a flying licence for its AirAsia India unit that it’s setting up in association with the Tata group, this official said. The limit will also be applicable to charter firms, training institutes and planes for private use.

The 25 March order also says the ministry will retain the right to issue airline licences, and “permission for starting new scheduled and non-scheduled air transport services including regional transport services shall be processed in the ministry for NOC (no objection certificate)”.

The only relaxation granted, therefore, through the abolition of the aircraft acquisition committee earlier this month is that permission won’t be needed every year for the actual induction of aircraft once the five-year in-principle approval is in place. The ministry official said the cap was necessary as it will prevent firms from taking undue advantage in terms of speculative gains from having orders on hand.

The limit won’t allow airlines to plan properly, said Mohan Ranganathan, Chennai-based safety analyst and member of the government appointed Civil Aviation Safety Advisory Council.

“This means no forward planning is possible beyond five years,” he said. “A scheduled airline should be looking 15 years ahead, not five years.”

Shares of Jet Airways dropped 1.95% to Rs.516.70 on BSE on Thursday. SpiceJet Ltd fell 0.74% to Rs.26.65 and Kingfisher Airlines’ stock slipped to a 52 week low at Rs.7.98, down 4.32%. The Sensex gained 0.7% to 18,835.77 points.


Source : livemint.com