Government scraps aircraft acquisition committee

Airlines will now be able to induct planes without civil aviation ministry's permission

Barely five months after reconstituting it, Civil Aviation Minister Ajit Singh today scrapped the Aircraft Acquisition Committee, which used to grant permission to companies to import planes. Airlines, charter companies and flying clubs will now be able to import aircraft without the permission of the ministry.

“Henceforth, only an initial no-objection certificate for operating air transport services and in-principle approval for acquisition of aircraft by scheduled operators will be required,” said the ministry.

Singh told Business Standard, “There will be no unnecessary bureaucratic hurdles and now no one can complain that civil aviation ministry is favouring one airline over another. We are liberalising the system. Now, only an in-principle clearance from the ministry will be required for import of planes, as it is essential under the RBI (Reserve Bank of India) guidelines.”

Experts and airlines hailed this as a positive move. “The committee was not required and served no purpose except adding to red tape. We welcome this decision and we will have to work towards reducing all regulatory barriers,” said Kapil Kaul of the Centre for Asia Pacific Aviation.

IndiGo President Aditya Ghosh termed the decision “a significant step” towards unleashing the potential of aviation in India.

According to Jet Airways’ CEO Nikos Kardassis, the move would help airlines plan and manage fleet requirement more effectively.

This year, IndiGo plans to add 16 Airbus A320s, while Jet is inducting two ATR-72s and eight Boeing 737s. “Aviation is a competitive business. It is highly cost-intensive. Airlines are free to import planes according to their requirement. Let market dynamics dictate their decision. If any airline inducts more planes than actually required, it will go down the drain,” said Singh.

The minister had reconstituted the acquisition committee in October 2012. H S Khosla, former director-general of civil aviation, was included in the revamped committee. The ministry also announced the procedure for the consideration and approval of applications are being streamlined.

Questions were once again raised over the government controlling the imports of planes after IndiGo’s proposal for import of 16 planes met road block. The proposal was subsequently approved.

However, reconstitution of the committee generated some controversy and there were media reports that the Prime Minister’s Office (PMO) ordered a stay on the committee.

Singh denied that the decision to scrap the committee has anything to do with complaints to the PMO. “The allegation was that I have become chairman of the committee and usurped all powers, and all this was not correct.”