Plight of Small Aircraft Operators

There is growing concern in some segments of the Indian civil aviation industry about the impediments being created on account of the non-cooperative and obstructionist approach adopted by the Delhi International Airport Limited (DIAL) towards the agencies operating small aircraft. Most adversely affected by this obduracy on the part of DIAL are the Non-scheduled Operator Permit (NSOP) holders who generally have business jets or turboprop that are smaller aircraft with much lower passenger capacity compared to aircraft operated by the regional carriers. Some of the NSOP holders have their aircraft based at the Indira Gandhi International Airport (IGIA) at Delhi. DIAL is the private operator which is a part of the public-private partnership (PPP) model adopted for the management of IGIA.

In February this year, the NSOP holders based at Delhi airport were in for a shock at a decision by DIAL to limit aircraft maintenance firms to the two sponsored by them and considered hangar services as non-aeronautical activity. The aviation companies affected adversely by this decision include Club One Air, SRC Aviation and Shaurya Aviation. Over the years, these aviation companies had invested heavily both in infrastructure and manpower to build up the capability to carry out day to day routine airworthiness checks and base maintenance of aircraft being operated by them. Also, treatment of hangar services as non-aeronautical activities would result in an increase in costs for operators of business aircraft as the rates of levy in this segment are higher. Apart from these impositions, the NSOP holders were required to pay 24 per cent additional royalty charges.

Maintenance of aircraft as well as ground handling are activities that are squarely the responsibility of the management of the aviation company

The Business Aircraft Operators Association (BAOA), however, stood by the affected NSOP holders and decided to even take the issue to court to support their cause and in principle resist any move by DIAL at monopolisation of services.

On June 15 this year, the NDA Government released the National Civil Aviation Policy (NCAP) 2016. One of the areas of major focus of NCAP 2016 is regional aviation and to provide impetus to this segment of the industry, the Ministry of Civil Aviation has crafted and built into the policy document what is called the Regional Connectivity Scheme (RCS). The policy on RCS essentially aims at expanding the network of aerial connectivity to regional airfields by making it financially viable and even lucrative for regional carriers as well as the NSOP holders operating small aircraft to undertake flights to regional airports. Thus the NSOP holders operating small aircraft can make a substantial contribution to the ambitious scheme of the government by providing connectivity to Tier-II, Tier-III and Tier-IV cities especially in remote and inaccessible areas of the country. These operators are extremely useful to society and provide services beyond the purview of the scheduled airlines such as for medical emergencies, disaster relief, tourism and movement of industrial workers for industries set up in remote areas. The NSOP holders operating small aircraft can thus play a significant role and help exploit the immense potential of regional aviation. Unfortunately, the impediments that DIAL has been creating for the operators of smaller aircraft militates against the objectives of RCS as enshrined in the NCAP 2016. In fact, the obstructionist approach of DIAL is likely to not only seriously impair the chances of success of the ambitious scheme to enhance regional connectivity; but in turn, adversely affect the contribution of the Indian aviation industry to the growth of the national economy.

The BAOA approached the Delhi High Court for making DIAL agree to permit small aircraft operators to carry out maintenance of aircraft on their inventory. As per the NCAP 2016, para 18 Maintenance, Repair and Overhaul (MRO), “Airport royalty and additional charges will not be levied on MRO service providers for a period of five years from the date of approval of the policy”. While DIAL may have relented in respect of maintenance of aircraft by small operators by themselves or by agencies of their choice, if DIAL continues to levy charges of around 20 per cent as royalty for MRO services provided by third parties to the NSOP holder operating small aircraft, it would be in clear violation of the policy laid down in para 18 of NCAP 2016 as quoted above.

More recently, in July this year, DIAL dropped another bombshell when they stopped small aircraft operators from undertaking self-handling. The DIAL achieved this by refusing to renew security passes for vehicles for air side movement. In the absence of vehicle passes, operators are being forced to depend on outsourced vehicles whereby compromising with safety, security and on-time performance of their aircraft. Here again, DIAL has adopted a course of action that is in direct contravention to the NCAP 2016, Para 4, Regional Connectivity which states, “Self-ground handling by airlines will be allowed for operations under Regional Connectivity Scheme at all airports”. DIAL is once again at fault as it continues to charge more than 20 per cent royalty on all ground handling activities carried out by third party operators.

Maintenance of aircraft as well as ground handling are squarely the responsibility of the management of the aviation company. Any lapse or inadequacy in these areas can have serious implications for the safety of the aircraft and its occupants. It goes without saying that the management of the aviation company can accept no deviation or compromise of any kind in these two areas related to both maintenance and operations of the aircraft. It would only be logical to assume that DIAL ought to have no business to interfere in these two areas that are extremely sensitive in nature. It is also evident that DIAL’s actions are driven by brute commercial interests with no consideration of the perspective of the operator. But what is more disturbing is the callous disregard that DIAL has exhibited for the National Civil Aviation Policy 2016 that ought to be the guiding light for all connected with the Indian civil aviation industry.

BAOA should initiate dialogue with all stakeholders including representatives of the Ministry of Civil Aviation. However, if DIAL does not alter its position and becomes more amenable to reason, the affected parties can always adopt the legal option to resolve the dispute between the DIAL and NSOP holders which will only be in national interest.