A recent deal between Jet Airways and Etihad Airways, valued at $379 million, forms part of the government's new policy to encourage foreign direct investment in India. It is hoped that the infusion of foreign direct investment into civil aviation will result in improvements to the economy, a growth in traffic at Indian airports and the creation of job opportunities.
In a recent judgment, the Supreme Court held that a state-owned foreign airline is not entitled to sovereign immunity in a consumer action for service deficiency. Relating to an alleged delay in the delivery of a consignment (which led to deterioration of the goods), the appeal was brought by Ethiopian Airlines, which contested an order handed down by the National Consumer Disputes Redressal Commission.
The Directorate General of Civil Aviation (DGCA) established an environment unit on June 5 2009, primarily aimed at reducing aircraft fuel emissions, reducing noise pollution due to aircraft movement, and developing other green initiatives for various stakeholders, such as airlines, air navigation service providers and airport operators. The unit also aims to provide technical guidance.
A policy circular issued by the Directorate General of Civil Aviation in 2007 laid down restrictions on the provision of ground handling services. Following stiff opposition, the directorate issued a revised policy in 2009, but airlines still felt that it did not go far enough. The Federation of Indian Airlines has filed an appeal in the Supreme Court of India against the policy, the outcome of which is awaited.
The Ministry of Civil Aviation recently constituted the Civil Aviation Economic Advisory Council to meet the increasing need for sustainable growth and passenger facilitation in the aviation sector. The council will advise on and assess policy frameworks for ensuring affordable, sustainable and viable air transport services and protect consumer interest through measures such as public disclosure of tariffs and service conditions.
The Civil Aviation Requirements on facilities to be provided to passengers by airlines due to denied boarding, flight cancellations and delays have been modified to include revised compensation provisions. Financial compensation payable by airlines is now based on block time instead of distance covered.
During the recent "Challenges of Indian Aviation" conference, International Air Transport Association Director General Giovanni Bisignani termed the service tax levied by the government on domestic and international airline tickets "illegal" under the International Civil Aviation Organisation rules. At present, service tax is levied at a rate of 10.3% on both domestic and international airline tickets.
The newly constituted Airport Economic Regulatory Authority Appellate Tribunal will hear its first appeal against an order rejecting a proposed 10% increase in aeronautical charges at two of India's busiest airports. GVK and GMR, which operate Mumbai and Delhi airports respectively, contested the order based on the premise that they are entitled to administer an automatic increase in "base airport charges".
In an attempt to deter the growing incidence of unruly passenger behaviour onboard aircraft, the Directorate General of Civil Aviation has proposed to amend the Aircraft Act 1934 and the Aircraft Rules 1937. The proposed amendments will seek to penalize improper passenger behaviour, irrespective of whether the offence is committed in Indian or foreign airspace.
Based on the result of a feasibility study conducted for the establishment of an autonomous regulatory body in India, the Directorate General of Civil Aviation intends to propose that it convert into the Civil Aviation Authority of India - a regulatory body that will have greater autonomy and enhanced powers in comparison to those that it presently exercises.
In June 2008 the Directorate General of Civil Aviation issued draft civil aviation requirements setting out compensation levels and facilities to be provided to passengers in the event of denied boarding, flight cancellations and delays; however, stiff opposition from airlines that were already dealing with heavy losses prevented them from being brought into effect. Finally, new regulations on these issues are now expected.
The government recently brought into force Chapter III (Powers and Functions of the Authority) and Chapter VI (Offences and Penalties) of the Airports Economic Regulatory Authority of India Act 2008. The chapters outline the authority's powers and functions and prescribe penalties in the event of non-compliance with its orders.
The Airports Economic Regulatory Authority of India Act 2008 authorized the establishment of an independent body to regulate tariffs and monitor the performance of airports. As a result, the Airports Economic Regulatory Authority was recently established. It is hoped that the new regulatory authority will help to create a level playing field and foster healthy competition.
The Carriage by Air (Amendment) Act 2008 recently entered into force, thereby incorporating the provisions of the Montreal Convention 1999 into Indian law. The amendment act should help to avoid complex jurisdictional discrepancies when deciding matters relating to passenger or goods liability.
The commencement of the new ground handling regime has been postponed for six months. The extension circular was issued the day before the implementation date of the new policy and is understood to be the result of pressure from labour unions of existing ground handling companies, including airlines, which have provided these services in the past.
In a recent press release the Ministry of Finance announced the withdrawal of the 5% basic customs duty on aviation turbine fuel. The government’s welcome step to ease the financial stress of the aviation sector is based on the view that an exemption from the customs duty will result in lowering the base price of aviation turbine fuel.
The director general of civil aviation recently issued a draft civil aviation requirement proposing the introduction of regulations and facilities for passengers who have been denied boarding or have suffered owing to flight or package tour cancellations. In cases of denied boarding, passengers will be entitled to compensation and full assistance.
The Directorate General of Civil Aviation recently issued a civil aviation requirement to address the grievances of airline passengers over ticket refunds from airlines. The objective of the requirement is to introduce certain minimum safeguards in the interests of the travelling public without interfering with airlines' commercial practices.
The Indian government recently published a policy document which provides clarification on several issues connected with foreign direct investment policy in Indian civil aviation. These clarifications are a step forward in the ongoing liberalization process in India’s fast-growing civil aviation sector.
Navi Mumbai International Airport, Mumbai’s second international airport, has received government approval for a greenfield development under the public-private partnership model. This new project will open up a number of other avenues of business in the civil aviation field.