Government revises financial norms for scheduled airlines operators

The Government has revised the equity requirements for scheduled operators. This has been done because the Government is of the view that the Civil Aviation Sector being highly capital intensive and requiring maintenance of high technical and safety standards, infusion of additional capital would be a pre-requisite for any addition in the fleet size.

It has been decided that paid up capital requirements for all private scheduled operators shall be as follows:-

(i)Airlines operating aircraft with take off mass exceeding 40,000 Kgs.

5 aircraft - Rs. 50 crores

For each addition of up to five aircraft, additional equity investment of Rs. 20 crores will be required.

(ii) Airlines operating aircraft with take off mass not exceeding 40,000 Kgs.

5 aircraft - Rs. 20 crores

For each addition of up to five aircraft, additional equity investment of Rs. 10 crores will be required.

All existing private operators will also be required to comply with the above requirements and, wherever necessary will have to raise their authorized & paid up capital to the prescribed minimum levels, within a maximum period of one year.

However, the financial strength of the Airline for induction of new fleet can be ensured by the net worth of the Airline. Therefore, the Government is of the view that there may be no need for insisting further enhancement of equity if the paid up equity/reserves of Rs. 100 crores is available with the airline.

It has also been decided that scheduled airline operator may be allowed to commence airline operations with one aircraft instead of three as presently prescribed in CAR. However, the requirement for augmenting the fleet size to five aircraft within one year of issuance of Scheduled Operator permit would continue.

The Government has also withdrawn the concession presently available to scheduled Airline Operators to have only 10% of the paid up capital at the time of issuing of the initial NOC.

The Director Gener45al of Civil Aviation has been directed to amend the relevant Civil Aviation Requirement (CAR) provisions accordingly to give affect to these changes.

Source : Press Information Bureau

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