Though the civil aviation ministry has given no-objection certificates (NOCs) to 16 companies to launch airlines in the past five years, only two - AirAsia India and Air Costa - have taken off so far.
Data secured from the ministry under the Right to Information Act show the ministry received 20 applications and it granted NOCs to 16 firms between 2009 and now.
The 16 include Vistara, Zexus Air Services, Air One, Premier Airways, Turbo Megha, Air Carnival and Zav Airways, which were granted an NOC in 2014.
Securing an NOC from the aviation ministry is the first step towards launching a scheduled airline. Upon receiving it, companies need to secure a permit from the Directorate General of Civil Aviation to start operations.
The NOC is valid for 18 months and is issued for both regional or national operations. While AirAsia holds a national permit, Air Costa has a permit for regional operations.
Ministry data show it extended the validity of the NOC of three companies. It also reveals NOCs granted to three companies lapsed as the firms failed to take the necessary steps to obtain a permit within the 18-month period. However, the companies applied for NOCs afresh and one of them secured the NOC again. Aviation experts say a mix of reasons including the financial crunch of promoters and inability to comply with the technical requirements make it difficult for companies to secure a permit. Entry barriers and the rules on import of five aircraft in a year for licence validity, and route dispersal guidelines mandating flights on certain regional routes, are also seen as impediment.
Kapil Kaul of the Centre for Asia Pacific Aviation, said: “Receiving an NOC does not mean a company can start operations. Lack of funding and inadequate knowledge of the aviation sector make it difficult for companies to secure operations permit. The conversion of an NOC to an operations permit is an increasingly complex process and can take up to a year and, in certain cases, more than a year. We see Air One and Premier Airways getting operational in a year. Market conditions continue to remain hostile and new start-ups need very strong levels of capitalisation.”
IT TAKES MORE THAN AN NOC TO FLY |
Source: Ministry of Civil Aviation |
According to IndiGo's former head of operations Shakti Loomba, the DGCA checks whether companies applying for permit has the management set-up, infrastructure at key bases and the financial ability to start an airline. “Companies at times do not go forward with their plans as they are unable to raise capital. The start-up costs of an airline are high and companies can require up to Rs 100 crore in start-up capital,” he added.