Central Vigilance Commission unearths Rs 190 crore flying club fraud

NEW DELHI: A large number of flying schools across India are involved in an elaborate fraud, posing as no-profit no-loss operations while raking in crores.

An investigation by the Central Vigilance Commission has found that a majority of flying schools/clubs in India posed as registered societies, operating on no-profit no-loss basis, to avoid paying the government full fee for operations. Resultantly, the government has lost at least Rs 190 crore in revenue, according to the CVC probe.

Airports Authority of India (AAI) officials allowed 28 flying schools to wrongly claim that they were either registered educational societies or were run on no-profit no-loss basis. This qualified them to pay only a nominal fee to the government.

Sources said the CVC has written to the civil aviation ministry to take appropriate action against officials who allowed the flying schools to hoodwink the system.

The CVC probe found several deviations from rules: These clubs were not registered as educational societies, most of them were not operating on a no-profit no-loss basis and some were even involved in commercial operations.

The nominal fee for flying clubs is just 10% of the original fee to be paid to the government. This nominal charge is only permitted for those that are registered as educational societies and run on no-profit no-loss basis, and not as profit-making entities. "The concessional rates were extended to 28 flying clubs without proper examination/justification," a senior official said.

The investigation found that none of the 28 clubs was registered as a society. Only four of them operated on a no-profit no-loss basis. To the surprise of the investigators, they found that one flying club was even a non-schedule operator registered with DGCA (Director General of Civil Aviation) since 2004.

In response to a questionnaire from TOI, AAI said, "Action being taken on CVC's recent instructions, outcome of the same will be made public as and when any decision is taken in this regard."

AAI asserted that it had "not allotted land to any flying school at nominal license fee since its inception" but did not discuss details of any other fee that the flying clubs may have had to pay the government.

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