Centre looks to give India wings, eyes SCO nod

By: and |
July 24, 2016 6:22 AM

The civil aviation ministry is likely to come out with a separate category of flying licence, known as scheduled commuter operator (SCO) permit, which will facilitate entry of new carriers that can ply on the new routes. This is a part of the government’s regional connectivity scheme (RCS), unveiled in the new civil aviation policy.

Sources in the ministry of civil aviation said the eligibility criteria in terms of flying hours, paid-up capital and fleet size are likely to be less stringent compared to scheduled air operator permit currently granted by sector regulator DGCA. (Reuters)Sources in the ministry of civil aviation said the eligibility criteria in terms of flying hours, paid-up capital and fleet size are likely to be less stringent compared to scheduled air operator permit currently granted by sector regulator DGCA. (Reuters)

The civil aviation ministry is likely to come out with a separate category of flying licence, known as scheduled commuter operator (SCO) permit, which will facilitate entry of new carriers that can ply on the new routes. This is a part of the government’s regional connectivity scheme (RCS), unveiled in the new civil aviation policy.

New carriers interested in plying on such routes can enter the market by applying for the SCO permit, which will be awarded much faster than the usual scheduled air operator permit (AOP), which takes around six to nine months time.

Sources in the civil aviation ministry told FE that the SCO permit is likely to be availed by the existing chartered airlines as they will easily fit in the RCS. Currently, there are 120 chartered operators with 393 aircraft, which fly under the non-scheduled operator permit (NSOP).

Sources in the ministry of civil aviation said the eligibility criteria in terms of flying hours, paid-up capital and fleet size are likely to be less stringent compared to scheduled air operator permit currently granted by sector regulator DGCA.

“We have had several meetings with the ministry officials. Though we are still awaiting clarity on chartered operators’ eligibility to participate in RCS, several such operators are interested in this scheme. Diverting and deploying some of our aircraft for the RCS scheme shouldn’t be a problem given the government-sponsored viability gap funding, along with other sweeteners in place,” Bhupesh Joshi, director and CEO of the country’s largest chartered operator, Club One Air, told FE.

The basic difference between a scheduled and non-scheduled carrier is that the former is mandated to publish its flying itinerary in advance, including aircraft deployed on each route, while the latter has no such requirement. Currently, under the sector regulator DGCA’s guidelines, the air operator permit is given under four heads as per the services provided by the operator. These are scheduled air transport service for commercial domestic and international service, which covers all the commercial airlines like Indigo, Jet Airways, etc.

Besides, other permits include scheduled regional transport service for commercial domestic non-metro services, non-scheduled air transport service for passenger charter services and air transport cargo service.

Ministry officials say bringing chartered operators into RCS would be crucial for the success of the scheme as they possess smaller aircraft and have the experience in serving smaller and remote airstrips. For instance, Club One Air has serviced more than 175 locations in the country with 10 planes that include Falcon and Cessna.

“It makes operational sense for charter operators to fly on the RCS considering the nature of their fleet… even though their aircraft are designed to cater to the luxury segment, a third of their fleet can easily be retrofitted to accommodate for 40 or more passengers,” the official said. He added that most of the commercial airlines work on an economy of scale model, which makes them inherently buy or lease wide or narrow body aircraft with high seating capacity… it obviously makes more sense for players with smaller aircraft to ply on these routes,” he added.

While the government is wooing the chartered operators for the scheme, these operators are also looking for a way to diversify from a capital-intensive and heavily taxed segment of chartered operations. “The ecosystem for chartered operation is not very favourable in the country, considering we have struggled to break-even in the past few years,” Joshi said. He singled out expensive maintenance, repair and overhaul (MRO) services available only in Europe and the US along with high cost of finance compared to other scheduled commercial carrier as the challenges faced by such operators.

Flying high

Scheduled commuter operator permit will facilitate entry of new carriers that can ply on the new routes which form part of the government’s regional connectivity scheme.

Applying for SCO will be relatively faster and easier.

Charter operators with non-scheduled operator permit will also be eligible to undertake scheduled operations on the RCS routes under new policy.

The eligibility criteria in terms of flying hours, paid-up capital, fleet size are likely to be less stringent compared to scheduled air operator permit.

The basic difference between a scheduled and non-scheduled carrier is that the former is mandated to publish its flying itinerary in advance, including aircraft deployed on each route, while the latter has no such requirement

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