Airline Operations

Regulatory Issues in India

By

K Gohain
Joint Director General of Civil Aviation
 Air Transport Scene Pre-1953

 Nine private airlines in operation

 Too many war surplus aircraft
 All airlines sick - beyond recovery
 Air Corporation Act 1953 passed
 Private airlines nationalised
 Birth of national carriers
 Air India
 Indian Airlines
 Air Transport Scene
Post Nationalisation
 Scheduled services reserved for
corporations by Air Corporation Act
 Monopoly to national carriers and
associates for scheduled services
 No competitive environment
 Impressive growth of Indian Airlines till late
eighties
 Birth of Air Taxi Operations

 Air taxi operations commenced in Sept.

1990
 Extensive expansion began in Feb., 1992
 Air taxi operations confined to highly
profitable routes and was only for non-
scheduled operations
 Air taxi operations, however, grew like
scheduled services
 It was then decided to repeal Air
Corporations Act
 Repeal of Air Corporation Act 1953

 Air Corporation Act repealed with effect from

1.3.1994
 To remove monopoly of air corporations on scheduled
services
 To enable private airlines to operate scheduled
service
 To convert Indian Airlines and Air India to limited
company
 To enable private participation in the national carriers
 Route Dispersal Guidelines

 With a view to achieve better regulation of air

transport services and taking into account the
need for air transport services of different
regions of the country, the Government
issued Route Dispersal Guidelines on
1.3.1994
 In accordance with Route Dispersal
Guidelines, all routes were divided into
Category I, II, IIA and III
 Category I Routes
 Following 12 trunk/profitable routes, which
connect metropolitan cities directly:

Mumbai-Bangalore Mumbai-Chennai

Mumbai-Delhi Mumbai-Hyderabad

Mumbai-Kolkata Mumbai-Trivandrum

Delhi-Bangalore Delhi-Chennai

Delhi-Hyderabad Kolkata-Bangalore

Kolkata-Chennai Kolkata-Delhi
 Category II/IIA & III Routes
 Category II - Stations in Jammu & Kashmir,
North-East Region, Andaman & Nicobar and
Lakshadweep Islands connected with stations
outside these regions
 Category IIA - Routes exclusively within
destinations in Jammu & Kashmir, North-East
Region, Andaman & Nicobar and Lakshadweep
Islands
 Category III - Routes other than those
included in Category I and II
 ASKM Deployment Requirements
 Scheduled airlines are mandatorily required to
deploy in Category II, IIA and III routes, a
specified percentage of capacity deployed in
Category I routes as per the following details –
 Category II – At least 10% of capacity deployed on
Routes in Category I
 Category IIA – At least 10% of capacity deployed on
Routes in Category II
 Category III – At least 50% of capacity deployed on
Routes in Category I
Note: Bagdogra in North Bengal has been included in the
North-East region as it is in the NE FIR and also in the ADI
of North-East
 ASKM Deployment Requirements

 The Route Dispersal Guidelines also

envisaged that for rendering prescribed
minimum service on routes in Category II
and III, the scheduled operator may
provide the service either by aircraft in his
fleet or with aircraft in any other operator’s
fleet on mutually agreed terms
GROWTH OF DOMESTIC PASSENGER TRAFFIC

25
PAX. CARRIED (MILLIONS)

18.17
20

14.54
13.32
13.32

12.81
15


12.23
11.98

11.91

11.86
11.64
  
 
10.5

  

8.84
8.47

10
8.06

 

5

0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

YEAR
 SHARE OF PRIVATE OPERATORS IN
CARRIAGE OF DOMESTIC PASSENGERS
80

70 68.5
63
61.4
58.8
60
52.8 52.6
50 46.5
% SHARE

40.9 41.2 41.4

40 36.6
34.4

30
23.7

20

10
4.9
0.4
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005(*)

YEAR
(*) Data for 2005 is upto Oct.
Daily Average Capacity Provided &
Passengers Carried

• Total Seats Deployed/Day - 89,000

• Total Passengers carried/Day - 59,000
• Overall System Seat Factor - 69.0 %
• Passenger Growth Rate - 22.0 %

Year 2005
 Regulatory Requirements
 In order to maintain orderly growth of airline operation, to
serve the needs of the country, in an efficient and safe
manner, the Civil Aviation Requirements, Section 3, Air
Transport, Series C, Part II were issued in 1994 which
stipulates the minimum requirements for grant of permit
to operate scheduled passenger air transport services
 Scheduled Operator's Permit is granted only to:
 A citizen of India; or
 A Company or a Corporate provided that:
• It is registered and has its principal place of business within
India;
• Its chairman and at least two-thirds of its directors are
citizens of India; and,
• Its substantial ownership and effective control is vested in
Indian nationals.
 Eligibility Requirements
 Before the Scheduled Operator's Permit is
issued, an applicant should have:
 A subscribed equity capital of not less than Rs. 30
crores in respect of aircraft of maximum take-off mass
exceeding 40,000 kg and not less than Rs. 10 crores
in respect of aircraft of maximum take-off mass not
exceeding 40,000 kg.
 A fleet of minimum five aircraft either by outright
purchase or through lease with maximum certified
take-off mass more than 5,700 kg and type certified
meeting the requirements of transport category
aircraft acceptable to DGCA.
 Eligibility Requirements Contd..

 To facilitate the start of operations, operators will be

permitted to operate with three aircraft and will be given
one year’s time to have the fleet size of five aircraft. The
fourth aircraft should be acquired within a period of six
months and the fifth aircraft within a period of one year.
 The aircraft shall be registered in India with current
Certificate of Airworthiness in normal passenger category.
 Adequate number of AMEs and own maintenance and
repair facilities for maintenance of aircraft at least up to
flight release or 500 hours, whichever is higher. For higher
maintenance, the operator should preferably establish his
own maintenance facilities, but can carry out such
maintenance using facilities of reputed organisation
approved by DGCA.
 Eligibility Requirements Contd..

 Sufficient number of flight crew and cabin crew but not less
than three sets of crew per aircraft. The flight crew should
hold current licenses issued by DGCA and appropriate
endorsements on the type of aircraft operated.
 Adequate number of AMEs and own maintenance and
repair facilities for maintenance of aircraft at least up to
flight release or 500 hours, whichever is higher. For higher
maintenance, the operator should preferably establish his
own maintenance facilities, but can carry out such
maintenance using facilities of reputed organisation
approved by DGCA.
 Sufficient number of flight crew and cabin crew but not less
than three sets of crew per aircraft. The flight crew should
hold current licenses issued by DGCA and appropriate
endorsements on the type of aircraft operated.
 Procedural Requirements
 An applicant shall first apply for an initial No-
Objection Certificate (NOC). The application shall be
submitted to the Ministry of Civil Aviation in a
prescribed proforma along with requisite fee.
 Before grant of NOC, approval of Foreign
Investment Promotion Board (FIPB), if foreign
investment is envisaged, and security clearance of
the Directors and Chairman of the firm is necessary.
 Foreign equity upto 40% and NRI/OCB investment
upto 100% would be permitted in the domestic air
transport services.
 Equity from foreign airlines is not allowed in
domestic air transport services.
 Procedural Requirements Contd..

 After scrutiny by the Ministry of Civil Aviation and approval of

the competent authority, applicants fulfilling the basic
requirements shall be issued the initial NOC by DGCA to
become a Scheduled operator.
 The NOC shall initially be valid for one year and six months
from the date of issue and shall stand automatically cancelled
if the applicant fails to obtain the Scheduled Operator's Permit
within this period.
 The competent authority may, however, extend the validity of
the NOC for a period upto six months depending on merits of
the case. However, where the aircraft proposed to be
imported is a new one with a definite delivery schedule,
extension of NOC may be allowed for the actual lead time of
delivery, even if it exceeds the total period of one and a half
years.
 Procedural Requirements Contd..
 After receipt of initial NOC, the applicant needs to take
necessary steps to the satisfaction of DGCA for establishing
the required infrastructure, recruitment and training of
manpower, Minimum Equipment List, maintenance schedules
and training manual etc.
 The applicant shall get the security manual approved by
BCAS.
 The applicant shall show adequate preparedness to DGCA for
conducting scheduled operations on sustained basis. The
applicant shall prepare following manuals:
 Operations manual in accordance with CAR Section 2 Series O
Part X. The manual shall contain the operations procedures and
policies to be adopted during operations.
 Maintenance Control (Quality Control) manual in accordance
with CAR Section 2 Series E part I. This manual will describe the
operator’s quality control and maintenance policies.
 Training manual for flight crew and cabin crew
 Procedural Requirements Contd..

 The applicant is required to submit to DGCA:

 Maintenance program
 Information on aircraft proposed to be imported to ensure
compliance of all ADs and mandatory modifications
 Establish a process to ensure that information in the
manuals is up-to date and in conformity with the rules
and regulations and that all concerned personnel are
familiar with the contents of the manuals.
 On completion of above preparedness, the applicant
shall apply in a prescribed proforma to the Ministry of
Civil Aviation for the issue of permission to import the
aircraft.
 Eligible applicants can import aircraft through foreign
exchange as per the rules and regulations of the Ministry
of Finance and/or RBI.
 Procedural Requirements Contd..
 The Ministry of Civil Aviation grants permission to the
applicant for acquisition of aircraft.
 The permission to import the aircraft shall be valid for one
year. It may be extended on one time basis by 3 months with
prior approval of the competent authority. Where the aircraft
to be imported is new one, the validity of import permission
shall be in accordance with the delivery schedule.
 Acquisition of aircraft within the country shall also be with the
approval of the competent authority.
 The applicant shall provide all details of the pilots and
engineers recruited by them and shall get their training
programme approved by DGCA and ensure completion before
actual acquisition of aircraft.

Note: Security clearance of foreign flight crew and engineers shall

be necessary before they can be allowed to operate/
maintain Indian registered aircraft.
 Specific Airworthiness Requirements
 Pressurised aircraft to be imported for scheduled
operations shall not be more than 15 years in age or
have completed 75% of its design economic life or
45,000 pressurisation cycles whichever is earlier.
 For the import of unpressurised aircraft, the decision will
be taken on a case to case basis and depends on
inspection of the aircraft and its records.
 DGCA would normally not allow import of more than 20
years old aircraft.
 Before import of an aircraft, the applicant shall ensure
that no major checks including those applicable to aging
aircraft are due within one year/2000 flight hours.
Specific Airworthiness Requirements
Contd..
 The aircraft shall be fitted with mandatory equipments as
specified by DGCA.
 The aircraft before acquisition was maintained by an
approved organisation.
 The engineers should be supported by sufficient number
of technicians in each category.
 DGCA may allow a few qualified and licensed foreign
engineers to carry out and certify maintenance work of
Indian registered aircraft for a limited period to enable
engineers of the operator to acquire necessary
maintenance experience for acquiring the type
endorsement.
 Other Airworthiness Requirements
 The operator is required to set up:
 Own facility for retrieving DFDR/SSFDR data. For preparing
readouts of data, he may have either his own facility or
arrangement with other approved facilities.
 Own CVR readout.
 Basic NDT facilities such as ultrasound, eddy current, magnetic
particle check, etc. commensurate with the scope of approval.
 At night stop stations, necessary technical literature,
consumable spares, tools and manpower needs to be available.
 With the increase in fleet size, the operator is required to set
up bench-test facilities at least for instruments, hydraulic and
pneumatic components, electrical units and other components
which need frequent shop checks.
 Operational Requirements
 The operator shall have:
 Operational management organisation which shall be
adequately staffed with qualified and trained personnel to
conduct operations safely and regularly.
 Operator shall designate competent and qualified pilots as
Director/Chief of Operations and Director/Chief of Flight Safety
responsible to DGCA for ensuring compliance of all operational
requirements and ensuring adherence to flight safety norms.
 Setup for crew scheduling and computerised system to maintain
their flying record and monitor compliance of FDTL, currency of
licenses, medical and proficiency checks, and refresher courses
done/due, etc.
 Approved arrangements/ facilities and manpower for imparting
training to their flight crew, cabin crew, flight despatchers and
other operational staff.
 Operational Requirements Contd..

 Adequate number of flight despatchers and other staff for

operational and flight planning, pre-flight briefing of flight crew,
etc.
 Facilities for conducting pre-flight medical examination of flight
crew and cabin crew.
 The operator engaged in international operations shall ensure
that all its employees posted abroad are fully aware with the
laws, regulations and procedures of those states in which
operations are conducted.
 The operator shall ensure that all pilots are familiar with the
laws, regulations and procedures, prescribed for the areas to
be traversed, aerodromes to be used and air navigation
facilities relating thereto, which are pertinent to performance
of their duties.
 Operational Requirements Contd..

 The operator shall have:

 Necessary operational documents and publications like
operations manual, CARs, AICs, NOTAMs, aeronautical
maps and charts, etc. for reference by flight crew
personnel at the main base and also at the night stopping
stations.
 Flight Safety Manual laying down his policies and
procedures for ensuring safety of operations, investigation
of occurrences, implementation of safety
recommendations, accident/incident prevention
programmes, etc. Proactive safety measures should be
adopted to the maximum extent.
 System to analyse DFDR/SSFDR data of all flights to
determine exceedances in flight operations and to ensure
compliance of operating procedures.
 Operational Requirements Contd..

 Scheduled operations shall be conducted from approved

operational bases and only to/from airports suitable for
the type of aircraft.
 Scheduled operators shall ensure that all the security
requirements stipulated by BCAS are strictly followed at
all airports.
 Operational Requirements Contd..

 The operator shall have a system to submit:

 The flight plan of each flight with the ATC unit and obtain
clearance well before the expected time of operation. For Air
Defence Identification Zones (ADIZ), Air Defence Clearance
shall also be obtained.
 Whereby The Pilot-in-Command or an authorised person shall
obtain meteorological and ATC briefings before undertaking the
flight.
 Whereby Articles classified as dangerous goods, arms,
ammunition, explosives and inflammable materials shall be
carried only with the prior approval of DGCA and shall have
facilities to train their personnel in handling dangerous goods
and ensure that requirements regarding packing, handling,
loading/ unloading and transportation of such goods are
complied with.
 Issue of Operating Permit
 After completion of preparedness and import/acquisition
of aircraft the applicant shall apply to DGCA for issue of
the operating Permit.
 Application shall contain the following information:
 Particulars of aircraft intended to be used;
 C of R and C of A of the aircraft;
 Financing pattern on which the aircraft has been bought/leased;
 Approval of maintenance organisation and details of approved
organizations toundertake major maintenance of the aircraft;
 Details of licenses and type ratings of the operating crew and
engineers, approval of key personnel by DGCA like the load and
trim sheet persons, flight despatchers, cabin crew, etc. If foreign
pilots and engineers are employed for a specified period,
approval of the competent authority shall have to be obtained;
 Insurance policy covering passengers and their baggage, crew,
third party risks, hull loss, etc.
 Issue of Operating Permit Contd..
 Acceptable proof of compliance of conditions of the NOC and/or
justification for any change in information supplied at the time of
obtaining initial NOC;
 Compliance of requirements for leased aircraft operations if the
aircraft is acquired on lease;
 Information to show the fulfillment of operational, maintenance
and security requirements;
 After scrutiny of the relevant documents , DGCA shall issue
the operating permit along with operations specifications for
Scheduled Operations stipulating conditions, if any.
 The permit shall be valid for a period not exceeding one year
from the date of issue.
 The operator is required to carry out operations in accordance
with the scope of the Permit and the Operations
Specifications.
 Renewal of Operating Permit
 It will be the responsibility of the operator to ensure that
during the period of validity of the Permit, capability of the
operator is not degraded in any way.
 The operator shall upgrade his operations only after prior
approval of DGCA and appropriate endorsements made in the
Operations Specifications.
 The Permit shall be renewable by DGCA every year against
payment of requisite fee of Rs. 25,000/-.
 The operator shall submit its internal safety audit report within
30 to 60 days prior to expiry of the permit. DGCA may also
carry out an audit of the operator’s facilities if considered
necessary.
 The operator shall demonstrate continued capability to
conduct the operations authorised under the operating permit.
Induction of New Type of Aircraft
 If the operator desires to induct a new type of
aircraft in his operations, it shall be done after
ensuring the following:
 Obtaining NOC from the Ministry of Civil Aviation,
 Establishing the required maintenance and other
facilities for the type inducted,
 Preparation of relevant manuals,
 Recruitment and training of manpower, etc.for the
type inducted
 Before commencing operations, the operator shall
have to acquire the required capability to conduct
operations with the new type of aircraft.
 General Requirements
 The operator shall intimate any change in the Board of
Directors/ Chairman/CEO at any time to the Ministry of Civil
Aviation and DGCA along with the details of new Chairman or
Director. New chairman and Directors shall be appointed only
after their security clearance.
 Prior permission of DGCA/Ministry of Civil Aviation shall be
required for:
 Change in the name of the Company;
 Change in management of the Company arising out of changes
in the equity holdings of the Company;
 Take over of the Company by another Company.
 General Requirements Contd..

 Scheduled operators can conduct charter/ non-scheduled

operations for transportation by air of persons, mail or goods
provided such flights do not change their approved operating
schedule.
 The applicant may, with the approval of the competent
authority, acquire suitable aircraft within the country, on
purchase/ lease for operation of services.
 Before deploying any additional aircraft for operations, the
aircraft shall be endorsed on the Permit.
 Scheduled Operators' Permit is not transferable.
 Landing and parking charges shall be payable by the operator
to the owner of the airfield. The Route Navigation Facilities
Charges (RNFC) shall be payable by the operator to the
organisation which provides these facilities.
 General Requirements Contd..

 The operator shall regularly submit to DGCA, information

relating to their operational, engineering, and commercial
and financial performance.
 The operator shall regularly submit to DGCA the
statistical data regarding his operation such as capacity
deployed, passengers carried, aircraft hours flown, cargo
carried etc. as per the prescribed proforma on a monthly
basis so as to reach DGCA office before the tenth day of
the next month.
 The scheduled operators shall issue passenger tickets in
accordance with the provisions of the Carriage by Air
Act, 1972. The tickets shall stipulate the conditions of
carriage including the liability of the operator.
 General Requirements Contd..

 The operator shall maintain a current insurance for an

amount adequate to cover its liability towards
passengers and their baggage, crew, cargo, hull loss
and third party risks in compliance with the requirements
of the Carriage by Air Act, 1972, or any other applicable
law.
 The operator may, with prior permission of the
competent authority, borrow an aircraft from another
operator on short term basis to meet their operator
exigencies.
 The operator shall get his flight schedules approved by
DGCA atleast 30 days in advance and operate services
in accordance with the flight schedules so approved.
 General Requirements Contd..

 The operator is bound to comply with the requirements

of any new rules or regulations promulgated from time to
time for scheduled air transport services.
 Degradation of the operator’s capability below the
required level or breach of any of the requirements of
relevant CARs or of any provisions of Aircraft Act, 1934,
Aircraft Rules, 1937, Civil Aviation Requirements, orders/
directions/requirements issued under the said act or
rules and as amended from time to time, shall render the
Operating Permit liable to alteration, suspension or
cancellation.