Airline Operations Regulatory Issues in India

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Airline OperationsRegulatory Issues in India

• By
• K Gohain
• Joint Director General of Civil Aviation

2
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

3
Air Transport ScenePost 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

4
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

5
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• Air Corporation Act repealed with effect from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

6
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

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Category I Routes

• Following 12 trunk/profitable routes, which
  connect metropolitan cities directly

8
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
• - Routes exclusively
  within destinations in Jammu Kashmir,
  North-East Region, Andaman Nicobar and
  Lakshadweep Islands
• - Routes other than those
  included in Category I and II

Category IIA
Category III
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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 ADIZ of North-East

10
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 operators fleet on mutually agreed terms

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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
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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.

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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.

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Eligibility Requirements
Contd..

• To facilitate the start of operations, operators
  will be permitted to operate with three aircraft
  and will be given one years 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.

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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.

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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.

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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.

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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 operators quality
  control and maintenance policies.
• Training manual for flight crew and cabin crew

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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.

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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.
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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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 operators facilities if considered
  necessary.
• The operator shall demonstrate continued
  capability to conduct the operations authorised
  under the operating permit.

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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.

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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.

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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.

37
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.

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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.

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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 operators 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.