The Directorate General of Civil Aviation (DGCA) will not cancel the air operator permit granted to AirAsia India as it hasn’t found any violation of ‘substantial ownership and effective control’ norms as alleged by its rivals.
The aviation regulator released a report based on directions of the Delhi High Court which had sought DGCA’s response to the Federation of Indian Airlines (FIA)’s plea alleging that the brand licensing agreement signed between AirAsia India and its foreign airline partner AirAsia Berhad, was not considered while granting licence to operate flights.
“I do not find that the terms and conditions laid down in BLA dilute the ‘substantial ownership and effective control’ of AirAsia India being vested in Indian nationals,” B.S. Bhullar, Director-General, DGCA said in an order on February 8, adding, “further, status on issuance of AOP [air operator permit] to AirAsia does not change.”
The FIA, which represents IndiGo, Jet Airways, SpiceJet and GoAir, had moved the Delhi High Court seeking a review of the air operator permit granted to AirAsia India.
The body had alleged that the day-to-day operations of AirAsia India were controlled from Malaysia as a result of the BLA signed in April 2013, violating the substantial ownership and effective control norms — a charge AirAsia India had denied.
AirAsia India is a joint venture between AirAsia Berhad, with 49 per cent stakes, and Tata Sons, with 51 per cent stakes.
“The BLA itself provides for compliance with applicable laws of India and also mandates the parties that ‘substantial ownership and effective control’ of the licensee (AirAsia India) remain, at all times, with Indian residents,” Mr. Bhullar noted.
The DGCA also examined the operating requirements of AirAsia India such as ancillary, branding, catering and in-flight services as suggested by the foreign entity in the brand licensing agreement. “The terms and conditions provided in BLA are for uniformity for brand use and quality of services and provide for compliance to local regulations,” the DGCA said. The BLA also mentioned the need to comply with Indian regulations, the regulator said.
It said that the use of common software platforms for innovation, commerce and technology as mentioned in the BLA is intended to bring “uniformity across networks” that is a “common practice in the aviation industry.”
The engineering, safety and ground operations are subject to Indian laws and the airline’s ‘operations manual’ for flight operations was also approved by the DGCA, the aviation regulator said.
The airline’s budget was also approved by AirAsia India’s Board of Directors, the DGCA said while examining the minutes of the airline’s Board meetings.
