Airlines not to get airport resources after mergers

The forthcoming policy on mergers and acquisitions in aviation may restrict transfer of airport infrastructure. It may also link transfer of flying rights to the number of miles flown on smaller routes.

The policy, being drafted by the Directorate-General of Civil Aviation, will address the issue of transfer of flying rights after mergers in case one carrier has international rights and the other does not.

The civil aviation policy requires a carrier to fly domestic routes for five years before becoming eligible to fly overseas.

"The policy has to deal with this issue. The question is whether a merged entity will get all the international rights or some or none," said a civil aviation ministry official.

The policy was proposed soon after Jet Airways' deal to acquire Air Sahara entered a turbulent zone following Jet's request to take over all of Sahara's airport infrastructure.

The policy is expected next month. The civil aviation ministry is not in favour of transferring the entire airport infrastructure after a merger. It had conveyed this to Jet Airways too.

Given the choked airports, a proposal is being considered to allow the Airports Authority of India (AAI) to take back all the infrastructure and redistribute it among airlines after assessing their requirement.

In addition, the acquirer will have to file specific applications to the aircraft import committee of the government to transfer aircraft of the airline it acquires.