Government revises norms for airline operations

20 January 2007

While this new norm would be applicable with retrospective effect for those having aircraft weighing 40,000 kilograms each, existing airlines would get a year's time to comply with the new norms. Moreover, the Government has stipulated that such airlines will have to pump in an additional Rs20 crore into the subscribed equity capital for every five additional aircraft they induct.

The move may not affect - Kingfisher that has a subscribed equity base of Rs372 crore and a fleet of 23 aircraft and the low cost airline Spice Jet that has a current subscribed equity base of Rs185 crore and a fleet of 10 Boeing 737s. Most other airlines would, however, have to pay up.

The new rules approved on Friday, would come into effect from the day that the order is published in the official gazette.

The rules have also been revised for smaller aircraft. Consequently, the subscribed equity capital for an airline with a fleet of five aircraft weighing less than 40,000 kilograms each has been doubled to Rs20 crore.

Such airlines would also have to pump in Rs10 crore into their equity capital for every five aircraft inducted. While the larger aircraft like the Boeing 737 and Airbus A-320 aircraft have a weight of more than 40,000 kg, smaller aircraft like Dornier and ATR have a weight of less than 40,000 kg.