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Air carrier operations

Operating authorisation

What procedural and documentary requirements must air carriers meet in order to operate in your jurisdiction?

As a first step, scheduled and non-scheduled air transport operators need a no-objection certificate from the Directorate General of Civil Aviation (DGCA) to import aircraft. This certificate is valid for three years. Thereafter, the operators will need to obtain permission from the Ministry of Civil Aviation to import or acquire the aircraft; this permission is valid for one year. For private import, an import licence is also required from the Directorate of Foreign Trade. Aircraft which are more than 18 years old cannot be imported for passenger operations. The DGCA can waive this requirement in certain situations.

Once permission is granted, a temporary certificate of registration may be granted for the purpose of bringing the aircraft by air. Where it is not feasible for the DGCA to inspect the aircraft, usually a temporary certificate of airworthiness or special flight permit is issued for the purpose of delivery of the aircraft in India. These temporary certificates/permits are valid only until the first landing in India.

For the issuance of a regular certificate of registration, an application for registration of the aircraft alongwith the requisite documents will need to be submitted within the stipulated timeframe.Without a certificate of registration or airworthiness, an operator cannot undertake air operation activities. For the grant of a scheduled operator’s permit, an airline must have a fleet of at least five aeroplanes or multi-engine helicopters, whereas at least one aircraft is required for a non-scheduled operator’s permit. Operators also need a licence for radio communication apparatus.

Ownership and control

Do any nationality or other requirements or restrictions apply to ownership or control of air carriers operating in your jurisdiction?

A scheduled or non-scheduled operator’s permit is granted to:

  • a citizen of India; or
  • a company:
    • that is registered and has its principal place of business in India;
    • whose chairman and at least two-thirds of whose directors are Indian citizens; and
    • that is substantially owned and effectively controlled by Indian nationals.

An air cargo operator's permit is granted to:

  • a citizen of India;
  • a group of individuals of Indian nationality or a registered trust or society;
  • a non-resident Indian or overseas corporate bodies; or
  • an Indian-registered company having its principal place of business in India with or without foreign equity participation (excluding non-resident Indian equity).

Financial requirements

What financial thresholds must air carriers meet to obtain operating authorisation?

The financial thresholds for scheduled operators, non-scheduled operators and cargo operators are as follows.

Scheduled air transport services (passenger)

An applicant for a scheduled operator’s permit must have the following paid-up capital:

  • operating aircraft with take-off mass of 40,000 kilograms or more:
    • up to five aircraft – Rs500 million (approximately $8.19 million); and
    • for every additionalfive aircraft – additional equity investment of Rs200 million ($3.27 million); and
  • operating aircraft with take-off mass of less than 40,000 kilograms:
    • upto five aircraft – Rs200 million ($3.27 million); and
    • for every additional five aircraft – additional equity investment of Rs100 million ($1.63million).

Non-scheduled air transport services (passenger and cargo)

To obtain a non-scheduled operator’s permit, an operator must have the following minimum paid-up capital:

  • up to two aeroplanes or helicopters – Rs20 million ($327,868);
  • between three and five aeroplanes or helicopters – Rs50 million ($815,000);
  • between six and 10 aeroplanes or helicopters – Rs100 million ($1.63 million); and
  • more than 10 aeroplanes or helicopters – Rs150 million ($2.44 million).

Air cargo operators

To obtain an air cargo operator's permit, the operator’s subscribed equity capital must be at least Rs10 million ($163,934).

Insurance coverage

What is the required level of insurance coverage for air carrier operations?

The operator must maintain comprehensive insurance to cover its liability towards passengers, their baggage, crew, cargo, hull loss and third-party risks in compliance with the Carriage by Air Act 1972 or any other applicable law. Insurance on Indian-registered aircraft must be with an Indian insurer, which can then reinsure up to 95% of the risk to an overseas reinsurer.

Safety requirements

What safety requirements apply to air carrier operations, including with regard to professional and technical certifications?

The DGCA has laid down detailed rules, regulations and procedures for regulating air transport and ensuring the safety of aircraft operations. No aircraft can be flown unless it possesses a valid certificate of airworthiness. Further, an aircraft which is more than 18 years old cannot be imported for passenger services. All aircraft owners and operators must comply with the engineering, inspection and manual and safety requirements, as specified by the DGCA.

Primary responsibility for the safe conduct of the operations and compliance with the laws, rules and regulations lies with the operator. The operator must develop its own detailed operating procedures necessary for safety, regularity and efficiency of operations within the framework of the laws. The DGCA must approve the operator’s flight safety manual, which shall clearly lay down the operator’s safety policies, flight safety awareness and accident/incident prevention programmes.

Environmental obligations

What environmental obligations apply to air carrier operations?

Airport and airline operators must produce an annual emission management report on:

  • their carbon footprint to monitor emission trends;
  • voluntary measures taken to reduce carbon dioxide emissions, especially in relation to fuel efficiency; and
  • certification in accordance with International Organisation for Standardisation (ISO) standards (eg, ISO-14001 and ISO 14064).

Airport operators must additionally submit the following data to the DGCA annually:

  • fuel consumption data for owned power generators;
  • fuel consumption data for airport-owned vehicles and equipment;
  • electricity consumption for the entire airport (inclusive of the electricity consumed by the tenants functioning inside the airport); and
  • electricity consumption for the airport operator only.

Airline operators must annually submit aviation turbine fuel consumption data for aircraft main engines and auxiliary power units for both domestic and international operations. Airport operators must carry out a noise mapping study around their airports, including areas directly under the flight paths, to assess the existing noise loads and the population affected within the various noise contours/maps.

Air traffic control

How are air traffic control services regulated in your jurisdiction?

The Airports Authority of India is the statutory authority responsible for providing air traffic services in India. No other agency may provide such services, unless approved by the DGCA. Air traffic services mainly include:

  • air traffic control services;
  • flight information services; and
  • alert services.

Air traffic services are provided by flight information centres and air traffic control units.

Routes

Do any licensing requirements apply to specific routes?

DGCA permission is required to operate an air transport service to, within and from India. Where an operator plans to operate on a new route, make a substantial alteration to or discontinue an existing route or introduce a new timetable, it must give prior notice to the DGCA and obtain its consent.

Are any public service obligations in place with respect to remote destinations?

Yes. All scheduled operators must deploy 10% of their capacity on remote routes.

Charter services

Do any special provisions apply to charter services?

Yes. The DGCA has prescribed minimum airworthiness and operational requirements and other procedural requirements for the grant of a non-scheduled operator’s permit. The DGCA has issued civil aviation requirements on the procedure for the issuance of non-scheduled flight clearances to foreign registered aircraft (including cargo flights, inclusive tour packages, charter flights, aerial photography, geophysical surveys, cloud seeding operations and non-scheduled flights by Indian operators to foreign destinations).

Taxes

What taxes apply to the provision of air carrier services?

Goods and services tax (GST) has replaced almost all indirect taxes in India (eg, excise duty, service tax, value added tax (VAT), central sales tax (CST) and entry taxes). Import of aircraft is exempt from GST, but leasing attracts 5% GST. Maintenance, repair and overhaul services attract GST. It is also levied on air travel. However, aviation turbine fuel is beyond the purview of GST, although it is still subject to CST and VAT. 

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