FIA asks PM to deny operating permitto AirAsia

08 Mar 2014


The Federation of Indian Airlines (FIA), a body representing private airlines, has written to prime minister Manmohan Singh not to grant operating permit to AirAsia, which is seeking to launch India operations.

According to a Business Standard report, FIA has called on Singh to intervene so that other airlines were not hurt by the move. According to the body, the decision on the new airline was on the basis of an ''incorrect interpretation of the FDI (foreign direct investment) policy''.

AirAsia India, a joint venture between Malaysia's low-cost airline AirAsia, the Tata group and Telestra Tradeplace Pvt Ltd, had secured a no-objection certificate from the civil aviation ministry, but was yet to receive an operating permit from the Directorate General of Civil Aviation (DGCA).

The FIA had moved the Delhi high court against the approval by the Foreign Investment Promotion Board (FIPB) to the carrier.

Issuing notices to FIPB and AirAsia, the court sought their responses by 12 March. The federation had earlier objected to the grant of a permit, in its reply to the DGCA's public notice seeking comment on the issue of licence to the Malaysian low-cost airline.

Meanwhile, FIA's associate director Ujjwal Dey, in the letter to the PM, said that FDI in aviation sector did not contemplate the introduction of new international airlines with new Indian joint venture partners, The Financial Express reported. 

''By allowing new entrants to invest with new joint venture partners, it would defeat the very purpose of the policy,'' the letter said.

''lnternational airlines would rather use the opportunity to enter India, which they were hitherto not permitted to, on their own with a new joint venture partner and, thereby, avoid having to invest in the existing loss-making airline industry,'' it pointed out.

''We understand the Directorate General of Civil Aviation is in the process of imminently issuing an operating permit to AirAsia (India). It is our submission before any such approval is given that the government must examine and consider the interpretation of the FDI policy, which we submit is being incorrectly expanded and wrongfully applied,'' the letter added.

In a recent development, a three-member committee under DGCA's joint director general AK Sharan, which was constituted to examine representations from parties that objected to granting of AOC to AirAsia India, had cleared the issuance of flying permit to the carrier.

''The committee in its report has not found any reason to keep on hold the processing of application of AirAsia for issuance of the permit,'' the DGCA committee report, put up on the agency website, said.

Criticising the DGCA decision, the letter to the PMO said, ''The FIA had submitted objections and asked for a personal hearing. None of the objections have been addressed in these findings nor was a hearing given to the FIA."

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