The Directorate General of Civil Aviation (DGCA) has decided that a commercial agreement between AirAsia India
and its Malaysian part-parent, AirAsia Berhad, does not violate the law
of the land.
has concluded the nature of the agreement is in full compliance with the Aircraft Rule, 1937, which governs aviation here. And, that no terms or conditions of the Brand Licensing Agreement dilutes the substantial ownership and effective control (SOEC) clauses regarding AirAsia India.
The regulator’s view essentially eliminates chances of an adverse court ruling, which would have put the airline’s future in question and even have led to suspension of its licence.
The high court in Delhi had asked AirAsia India
to send its brand licensing agreement to DGCA
for examining. The case was filed by Subramanian Swamy, ruling party MP and the Federation of Indian Airlines, comprising the older entities in the segment. They’d both contended the agreement violated the condition on SOEC, which says control of an airline
should be in India and be run by Indian nationals.
The agreement signed between Bo Lingam, operations head of AirAsia Bhd and Tony Fernandes
on behalf of AirAsia India
mandates that the latter strictly complies with the parent airline’s requirements on various operational aspects. These include branding, catering, inflight services, engineering, finance, flight operations, marketing and network planning.
“I do not find that the terms and conditions laid down dilute substantial and effective control of AirAsia India
being vested with Indian nationals. Further status of the AOP (air operator permit) issued to AirAsia India
doesn’t change,” DGCA
chief B S Bhullar
“We have had non-stop attacks since launching the airline.
But, the team has remained focused in its job. We didn’t get sidetracked by the noise which was previously driven by our competitors. I thank the Indian regulator
for being fair.”
Bhullar says AirAsia Bhd’s guidelines regarding services like ancillaries, branding and inflight services ensure passengers have the same standard of service when they fly across the world.
Regarding flight operations of the airline
being controlled from Malaysia, the regulator
feels this is according to the operations manual of DGCA
and executives have been appointed who can be held accountable in case of non-compliance.