Now, procedural grind: AirAsia set to apply for NoC

AirAsia's Indian dreams could take wing soon, with the airline preparing to apply for what is known as an 'initial NoC' to the Ministry of Civil Aviation

Sindhu Bhattacharya April 05, 2013 13:57:14 IST
Now, procedural grind: AirAsia set to apply for NoC

New Delhi: AirAsia's Indian dreams could take wing soon, with the airline preparing to apply for what is known as an "initial NoC" to the Ministry of Civil Aviation. "This NoC application would be submitted anytime now," a person close to developments on AirAsia's proposed new airline told Firstpost.

He said initially, there was no need for either AirAsia CEO Tony Fernandes or joint venture partner Ratan Tata to set up meetings with ministry officials or the minister of civil aviation Ajit Singh. "We need to first submit a prescribed form to get the initial NoC. If the ministry then calls for a meeting, we will go," said this person.

Now procedural grind AirAsia set to apply for NoC

AirAsia wants to set up a new airline in India from scratch, in which Tata Sons will hold 30 percent equity. Reuters

AirAsia wants to set up a new airline in India from scratch, in which Tata Sons will hold 30 percent equity, Telestra Tradeplace another 21% while 49 percent stake would be held by the Malaysian airline. The person quoted earlier said that the process of applying to the Ministry of Civil Aviation begins now since approval for the joint venture was received from the Foreign Investment Promotion Board (FIPB) recently.

But the road ahead for AirAsia is a long and perhaps winding one. The aviation regulator DGCA lists a number of things AirAsia will have to comply with before it get a Scheduled Operator Permit (SOP).

This list begins with the regulator issuing a letter of NoC, accepting fees for an SOP permit and then issuing another NOC for AirAsia to import aircraft. Once the new airline has cleared these hurdles, it will have to submit a list of its board of directors and all these people will then have to obtain security clearance from the Ministry of Home Affairs.

As per rules under which the opened up Indian airlines for investment from foreign airlines, the board must have majority Indian members, CEO and others must be Indian and substantial control of the airline must remain in Indian hands at all times.

Once the board of directors has been cleared, the airline will need approval from the Bureau of Civil Aviation Security and then approval of the base from which it plans to operate. AirAsia has already said it plans to operate from Chennai.

The checklist of approvals to be sought before the first AirAsia domestic flight can operate in India is a very long one even after the stage of BCAS approval is reached. There will be examination of its flight safety and other training, aircraft's airworthiness, its preparedness on ground handling and a range of other facilities.

It is significant to note that Minister Ajit Singh continues to talk of "procedural" issues with any application AirAsia will make to start an airline. Singh has, in the past, questioned the airline's intention to set up a new airline instead of bringing FDI in an already established Indian airline.

So will AirAsia's proposal be held up at several stages before it gets approved for scheduled operations? This remains to be seen.

AirAsia has already raised enough number of eyebrows with its 2 million seats for free offer where it has sold seats from India and other countries to Malaysian cities and beyond for free - fliers have to pay only airport charges and taxes. This, sources tell us, has raised the hackles of LCCs in India who are usually restrained from unleashing low fare sales by the ministry and by DGCA.

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