Foreign airlines, investors not to control management of Indian carrier: DGCA

Tags: News
In a move which could affect the Jet-Etihad deal or start-up carriers like Tata-SIA or AirAsia India, DGCA has made it clear that foreign airlines or investors would not have the right to control the management of an Indian carrier.

Following apprehensions expressed on these lines by various quarters, the aviation regulator has given effect to amendments in a rule relating to grant of flying permits to new airlines in the country, official sources said here.

The Directorate General of Civil Aviation (DGCA) has stipulated that a scheduled Indian airline cannot enter into an agreement with a foreign investing institution or a foreign airline which could give these foreign entities the right to control the management of the domestic operator.

It has also made it clear that such foreign entities could have representation on the Board of Directors of the Indian airline company, but not more than one-third of the total number, the sources said.

Analysts feel that the latest revision to the Civil Aviation Requirement (CAR) could affect the fortunes of Etihad acquiring 24 per cent of stakes in Jet Airways for over Rs 2,400 crore, apart from the start-ups companies -- AirAsia India and Tata-Singapore Airlines.

These airlines are at various stages of getting final permissions from the government to launch new operations.

The changes in the CAR on minimum requirements for grant of permit to operate scheduled passenger air services come in the backdrop of objections raised by various quarters, including politicians, in courts, Competition Commission and other regulatory bodies.

In case of the Jet-Etihad deal, government and regulatory authorities gave their nod only after being satisfied that effective control would remain in India as Jet Airways was an airline registered here.

The revised CAR also makes in mandatory for the applicant airline firm to demonstrate adequate organisation, ground handling and maintenance arrangements, training programme and method of control and supervision of flight operations, before they get an Air Operator's Permit or flying license.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Signalling good times, current account deficit is likely to grow from here on

    The current account deficit (CAD) numbers for April-June quarter declined sharply to 1.7 per cent of GDP.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Nigavekar

Disruptive innovation in education

The past two weeks had a fair share of interesting ...

Rajgopal Nidamboor

Regain the spirit of focused power

For aeons, the human race has been experimenting with a ...

Gautam Gupta

Manufacturing must keep workers’ welfare in mind

It may be early days yet, but the labour reforms ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture