To prevent private jet
owners from evading customs duty by importing aircraft through the
non-scheduled operator (NSOP) route, the Directorate General of Civil
Aviation is looking at delicensing all NSOP permit holders who have a
fleet of less than three aircraft. As many as 80 NSOPs of the 120 NSOPs
in service at present stand to be delicensed once the regulator amends
the minimum requirements for grant of permits to non-schedule operators.
The change in regulations
is also intended to address concerns raised by US-based Federal
Aviation Administration (FAA) regarding safety oversight mechanism for
non-scheduled operations.
As per the latest
available information, there are 52 NSOPs with one aircraft, 28 NSOPs
with two aircraft, 13 NSOPs with three aircraft and only 27 NSOPs have
more than three aircraft. Only a third of the total of 120 NSOPs in
service may retain their permits once the new regulations come into
force.
A senior official in DGCA
said, "When we were reviewing regulatory requirements for NSOPs, we
found that most NSOPs fall in the general aviation category or perform
limited charter operations for company executives. Private jets are
often imported through the NSOP route to save on customs duty. We
decided that non-scheduled operators with less than three aircraft will
not be permitted commercial operations to plug such loopholes."
Currently, an aircraft
imported for personal use attracts import duties between 19 percent and
21 percent, while one imported for commercial operations attracts duties
of 2.5-3 percent only, as the latter is not subject to countervailing
duty and special additional duty. This differential in tax structure has
led many private jet owners to import aircraft through NSOP route to
save on customs duty.
Consolidation in the
business aviation industry would also aid DGCA is strengthening its
safety oversight mechanism for the category. "Post the findings of the
Federal Aviation Administration (FAA), DGCA had constituted a committee
to address concerns raised by the US regulator as relates to the NSOP
sector. Once private jet owners are weeded out of the NSOP category,
safety oversight would become more effective", added the official.
The FAA is scheduled to
conduct a fresh audit of India's safety oversight mechanism later in
December this year. The US regulator had downgraded India to category II
of safety ranking earlier in January 2014, which had barred Indian
carriers from expanding operations in the United States. The DGCA has
been working to meet all requirements pointed out by FAA to regain
category I status at the earliest.
As per the proposed
amendment in CAR, non-scheduled operators' permit holders would now be
required to have a minimum fleet of three aircraft or three helicopters
either through outright purchase or on lease. The aircraft shall be
registered in India and shall hold a certificate of airworthiness in the
normal passenger category. To facilitate the start of operations, the
operator will be permitted to commence services with one
aircraft/helicopter but will have to increase fleet size to three within
a year of securing a NSOP permit.
The existing NSOPs will
be given an option to either raise their fleet size to three
airplane/helicopter as per the revised CAR or get themselves converted
into private category.
DGCA issued the
notification to amend the minimum requirements for grant of
non-scheduled operators' permit on Monday. Stakeholders have to submit
their comments by Nov 12, 2014.
At present, DGCA issues
permits to carry out commercial operations under scheduled and
non-scheduled categories. However, though requirements are different for
scheduled, non-scheduled and general aviation aircraft a single
certification manual CAP 3100 is used for certification procedures for
all commercial operators. The regulator is now in the process of
segregating certification requirements and management by tailoring
airworthiness requirements specific to each category.
- Source: http://www.business-standard.com
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