Foreign-registered planes may get nod to operate in India

Source: The Economic Times, Oct 14, 2016

NEW DELHI: The government is likely to allow foreign-registered planes to operate in India in its endeavour to make it easier for aircraft leasing companies to do business here.

Currently, any aircraft that is being brought to India has to be first registered with the Directorate General of Civil Aviation (DGCA), a rule that has been seen as an obstacle in taking planes on lease by airlines at a time when India is pushing for increased regional air connectivity.

Exemption from this rule will make it easier for the lessor to take back the aircraft in case of a dispute with the airline operating the aircraft. Since there will be less risk of their planes getting stuck in India, the leasing companies could also reduce the rentals, helping local airlines. On Thursday, the civil aviation ministry called a meeting of aircraft lessors as part of efforts to ensure availability of aircraft to implement the regional connectivity scheme. “We heard the suggestions made by the lessors in the meeting. We should be able to allow foreign-registered aircraft to operate in India,” said a senior aviation ministry official, who did not want to be named.

The meeting was attended by Minister of State for Civil Aviation Jayant Sinha, Aviation Secretary RN Choubey and the DGCA director-general.

ET reported first, on Monday, about the ministry’s plan to meet the lessors and the likely decision. Analysts welcomed the move.

“This move may help bring compadown the aircraft repossession risk for foreign lessors and hence the cost of leasing. We have had some unfortunate incidents around aircraft repossession in India and that has hurt sentiments among aircraft lessors. Many leading countries allow this, like the USA, Russia, Italy, the Philippines, etc.,” said Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG.

KPMG, in August, had requested the ministry to consider allowing foreign-registered aircraft for the regional connectivity scheme, Dubey said. DGCA officials said they will have to form a new rule to allow foreign-registered aircraft to operate here.

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