Saturday, Oct 25, 2014

DGCA seeks fresh public objections after clearing AirAsia for take-off

AirAsia India is the first airline to be launched since the government in September 2012 allowed 49 per cent FDI in civil aviation from foreign carriers. Reuters AirAsia India is the first airline to be launched since the government in September 2012 allowed 49 per cent FDI in civil aviation from foreign carriers. Reuters
Written by Mihir Mishra | New Delhi | Posted: January 15, 2014 3:38 am | Updated: January 15, 2014 3:39 am

In a move considered unprecedented, the government has asked the public to raise fresh objections, if any, to granting licence to low-fare airline AirAsia India to start commercial operations in the country despite the venture being cleared by the Foreign Investment Promotion Board and getting the civil aviation ministry’s no-objection certificate.

The latest public notice was issued by the Directorate General of Civil Aviation on Monday. The notice comes despite AirAsia going through a two-month period last year during which the public and interested parties had time to file objections, if any.

AirAsia India is the first airline to be launched since the government in September 2012 allowed 49 per cent FDI in civil aviation from foreign carriers. It is a three-way joint venture among Malaysia’s AirAsia — Asia’s largest budget airline — Tata Sons and Telestra Tradeplace.
The venture was announced last February and had subsequently been approved by the FIPB and the civil aviation ministry.

But the latest DGCA notice offers a 30-day window to “the public and all the persons likely to be affected by the grant of this permit to submit their objections or suggestions, if any”.

The notice effectively shifts the timeline set by the airline to start flying by the end of February.

A top civil ministry official claimed the notice was unavoidable “as the government is under a lot of scrutiny from all quarters” and has been issued under existing rules.

“We could not have skipped it since it would have meant not following rules and opened us to criticism,” the official said.
Civil Aviation Minister Ajit Singh was not available for comment.

Responding to an email from The Indian Express, an AirAsia spokesperson said: “We will not be able to comment at this point of time”.
Aviation industry insiders, including a retired senior DGCA official, said this was the first time such a public notice had been issued by the government. Since the early 1990s, the government has issued licences to over a dozen airlines but has never issued such a notice, they said.

BJP leader Subramanian Swamy went to court last year objecting to the clearance given to AirAsia India to launch an airline. The case pending in the Delhi High Court argues that foreign investment rules for the sector do not allow a new airline to fly in the domestic skies.

The civil aviation ministry had itself at one stage argued against the AirAsia proposal claiming that FDI rules did not allow a greenfield airline to be set up but it was overruled.

Analysts said they were surprised by the DGCA move as time to seek public comments was over.

“Public notice should have been before the NOC stage and not at this stage,” said Kapil Kaul, CEO of the Centre for Asia Pacific Aviation, an aviation think-tank. The clearances required now are technical ones to be decided upon by the ministry and the DGCA and there can be no role for the public in them, he said.

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