Airport assets transfer on use

Transfer of infrastructure after mergers will not be automatic.

The government has said it owns all airport infrastructure even though it was being used by airlines.

Therefore, the transfer of airport infrastructure and flight rights after the merger of two airlines will not be automatic and will depend on their usage.

Emphasising this, the mergers and acquisition policy for the aviation sector, cleared by the government recently, says the acquiring company can get the infrastructure of the acquired airline only if it is to use the infrastructure.

This will also prevent an airline from transferring its excess infrastructure to another. "It may be clearly stated that the user rights belong to the government and/or to the airport operator and therefore, cannot be transferred by one airline to the other airline in any event," the policy points out.

For example, Jet Airways will get the entire airport infrastructure and flight rights of Air Sahara under the acquisition deal announced earlier this year only if Jet was willing to use them.

"In terms of schedules and connectivity, it will be in public convenience if usage of such infrastructure is allowed to the airline that takes over the aircraft provided the user rights are actually used by the airline," the policy says.

On the other hand, Jet Airways can claim Air Sahara's infrastructure at an airport only if Jet is operating flights to that airport. Only the user rights that are actually under use by the airline that transfers the aircraft will be conferred on the airline that takes over. All other rights will be taken over by the government.

Further, the user rights will be available to the acquirer only till the time the infrastructure is under actual use. If the acquirer does not does not use the infrastructure, it will lose the user rights.

The policy also links parking slots to aeroplanes. Thus, Jet Airways can get all of Sahara's aeroplane-related infrastructure like parking slots, hangars, night parking and bays only if it bought the entire fleet of Sahara.

With the acquisition of planes comes the related infrastructure. As the airport operator does not charge for this, its transfer will be smooth.