The Indian aviation regulatory authority, the Director General of Civil Aviation (“DGCA”), recently notified civil aviation requirements (“CAR”) which enable the Indian scheduled operators to operate foreign registered Aircraft without registering them with the DGCA. This is effective from January 31, 2018.
Previously, in order to operate a foreign aircraft on dry lease, it should have been registered in India. Indian operators would therefore take aircraft on lease and have them registered with the DGCA, even if lessors / lenders would prefer to have the aircraft registered in their home state.
Per this new CAR, Indian scheduled operators will now be allowed to take on lease and fly the foreign registered aircraft on domestic or international routes without the need of registering them in India with the DGCA.
Indian scheduled operators will need to submit to DGCA certain documents, such as aircraft leasing form in the prescribed format, copy of the proposed lease agreement, and consent of foreign civil aviation authority, at least 90 days prior to the proposed commencement of operations. Upon submission of the requisite documents, DGCA will get in touch with the State of Registry for, inter alia, entering into an agreement under Article 83bis prior to granting permission.
Upon grant of permission, the foreign registered aircraft will be entered in the scheduled air operator certificate. The permission for operating the aircraft under lease may be withdrawn in the event there is any issue relating to airworthiness and safety of the aircraft operations.
The leasing / import of foreign registered aircraft, inter alia, will be subject to the following:
- Indian customs regulations;
- FAA/EASA type certification;
- Provision of mandatory occurrence reports of the leased aircraft for the last 5 years by the lessor / State of Registry;
- Meeting the age criteria;
- Certain licenses/permits including, certificate of registration, certificate of airworthiness, airworthiness review certificate, noise certificate, et al.;
Given the current scenario in India, this is indeed a welcome step taken by the DGCA which might prove beneficial for the lessors / lenders / owners. This would enable them, inter alia, to smoothly and easily secure deregistration and re-possession of aircraft in default scenarios, as it would be convenient for them to approach and / or deal with the aviation authority in their jurisdictions where aircraft are registered having minimal interaction with the DGCA.
However, there are certain issues which would be tested in due course. For instance, the CAR is silent on the role and responsibilities of the DGCA in deregistration and export process of the aircraft. Further, the CAR also does not provide any mechanism to resolve conflict, if so arises, between its provisions and any other regulations. For example, whether a foreign registered aircraft can be detained by the Indian authorities if there are liens on the aircraft, and / or where Indian operator has been declared bankrupt and a moratorium is declared by the adjudicating authorities. Since, the CAR is still in its nascent stage, it would be interesting to see how it works / evolves in practical terms.