New Indian Proposal Threatens Charter Operators

 - October 23, 2014, 2:30 PM

Indian lawmakers are considering a proposal by the country’s Directorate General of Civil Aviation (DGCA) that would revoke the commercial licenses of nonscheduled operator permit (NSOP) holders with fewer than three aircraft available for charter. Affected NSOPs that do not augment their fleet to at least three aircraft within one year will have to operate in the private category, depriving them of permission to offer charters. India’s Business Aircraft Operators Association (BAOA) sees the proposal as “a kneejerk reaction” to the DGCA’s shortage of flight observation inspectors (FOIs) and its difficulties in recruiting more of them. The process of registering private aircraft owners as NSOPs requires the services of an FOI. This scarcity of FOIs is also hindering India’s compliance with an FAA requirement that would help restore the country’s safety ranking to Category 1.

According to the DGCA, most NSOPs are running limited charter operations and in reality fall under the general aviation (privately owned) category. Aircraft importation duty costs private companies 20 percent, while NSOPs pay only 3 percent. “This imbalance is creating problems. Private owners register under NSOPs that in turn require FOIs, which are not easily available. We are asking for rationalization in the tax structure that will charge both categories the same duty,” BAOA president Rohit Kapur told AIN.

The issue could be overcome, said Kapur, if aircraft management companies are permitted to function in India. Of the 120 NSOP holders operating in India, 93 own a combined 147 aircraft and just 27 own more than three aircraft each.