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Govt scraps aircraft acquisition panel, carriers can now expand fleet without further delay

Mail Today Bureau     March 22, 2013
The Civil aviation ministry has made it easier for commercial airlines and flying schools to acquire aircraft by scrapping its Aircraft Acquisition Committee (AAC), which vetted such proposals through a cumbersome process that needlessly delayed fleet expansion plans.

Carriers will now require just an initial no-objection certificate (NOC) to start operations and have the freedom to induct planes without seeking approval from the ministry, a government spokesman said. "The permission for actual induction of aircraft will no longer be required from ministry of civil aviation," he said.

The spokesperson added that the decision to abolish AAC is yet another step towards liberalisation in the civil aviation sector after allowing 49 per cent foreign direct investment in airlines.

The decision will help the AirAsia-Tata Group joint venture to be off the blocks more quickly and they have already advanced the date of launching the airline to June from the year-end schedule. The decision also comes at a time when Abu Dhabi airline Etihad is in talks for picking up stake in Jet Airways.

Aviation expert Harsh Vardhan said, "The decision will bring down red tape in the civil aviation sector, which was holding up expansion plans of commercial airlines. It will also ensure that airlines are free to book as many aircraft as they need instead of letting the government exercise control over their commercial decisions."

Kapil Kaul, chief executive officer, Centre for Asia Pacific Aviation (South Asia), said, "The committee served no purpose and only promoted red tape. We strongly welcome the decision to do away with such unnecessary regulations. All such regulations which create hurdles, add complexity and increase structural challenges should be removed."

A senior private airline official told Mail Today that "the committee had started interfering even in purely commercial decisions such as the number of planes we were ordering".

Ironically, the government has virtually admitted that setting up the committee was a fiasco. "AAC was abolished as it was no longer relevant. Matters relating to initial noobjection certificate and inprinciple approval for acquisition of aircraft by scheduled operators would now be processed by DGCA (Directorate General of Civil Aviation)," the spokesperson said.

Henceforth, only the initial NOC to launch scheduled or non-scheduled air transport services and in-principle approval for acquisition of aircraft would be required from the ministry as part of the requirements under the Aircraft Rules and Reserve Bank of India guidelines, the spokesperson further said.

Interestingly, ACC was constituted last October by civil aviation minister Ajit Singh "to consider, examine and make recommendations on all proposals for permitting import or acquisition of aircraft for various purposes".

The control extended over aircraft acquisition by scheduled and nonscheduled operators, private operators and flying training institutes.

Courtesy: Mail Today 

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