Acquisition of Aircraft by Airlines Liberalized – Government Abolishes Aircraft Acquisition Committee

In a major decision taken by Minister of Civil Aviation, ShriAjit Singh, the Government has done away with the control over acquisition of aircraft by scheduled and non-scheduled operators, private operators and flying training institutes. The permission for actual induction of aircraft will no longer be required from Ministry of Civil Aviation (MoCA).  Henceforth, only initial No Objection Certificate for operating scheduled air transport services and non-scheduled air transport services including regional air transport services, and in-principle approval for acquisition of aircraft by scheduled operators will be required from the MoCA, as this is a requirement under Rules 134 and 134A of the Aircraft Rules and the RBI guidelines to facilitate acquisition of aircraft.

The Minister has also abolished  the Aircraft Acquisition Committee (AAC) as it is no more relevant.  The matter relating to initial No Objection Certificate and in-principle approval for acquisition of aircraft by scheduled operators will now be processed by concerned Division of the Ministry.

At present, MoCA™s approval is required for issuing initial No Objection Certificate in cases of scheduled airlines, non-scheduled airlines, flying institutes and private category.  Besides this, MoCA™s approval is also required for acquisition of aircraft by scheduled and non-scheduled operators, flying training institutes and for private use and also for replacement of aircraft.  After implementation of this decision, no approval from MoCA will be required by anybody for actual import / replacement of aircraft and all such cases will be dealt by the DGCA for completion of necessary formalities.

This decision is another major step towards liberalization in the civil aviation sector after allowing 49% FDI in airlines. This will remove duplication and also reduce delays in seeking approval and will do away with the cumbersome procedure which airlines have to follow before acquisition of aircraft.  The decision will help airlines to plan better for future induction of aircraft and also maintain timeliness of acquisition.

Permissions accorded for acquisition of aircraft w.e.f. December,2011 to March,2013

Total Approvals viz-a-viz application by scheduled airlines/private airlines are as under:

Non Scheduled airline:              37                                  36

(One proposal for acquisition of aircraft has been differed at the AAC level, to meet with the existing procedure)

Flying training Institute:              08                                  08

Private Use:                      05                                  05

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