“Airports will shape business location and urban development in the 21st century as much as Highways did in the 20th century, Railways in the 19th century and Seaports in the 18th”–Anonymous
Airports are the gateway to the country’s infrastructure. The aviation sector is one of the prime movers for the economic growth and a strategic element of employment generation.The Indian civil aviation sector has managed to exhibit resilience to the recent global economic slowdown.
With Foreign Direct Investment (FDI) limit being raised to 49% in the sector, it is now going to buzz with even more competition and action. We know that the aviation sector has shown robust growth in passenger and cargo traffic, there has been modernisation and augmentation of capacities in line with international standards, in a major way, at various metro, non-metro airports.
As per the data from a paper from Association of Private Airport Operators,the Total air passenger traffic in India has increased from 109 million in 2008-09 to 143 million in 2010-11. Available forecasts suggest that by 2020 air passenger traffic in India will be around 400 million. To meet this huge air traffic demand, the country will require approx. 350-400 operational airports across the country. This implies that huge private investments will have to be attracted as AAI alone will not be able to raise such huge funds (Rs. 60 – 70,000 crores). During the last two decades, from a fleet of only about 100, airline companies now operate 435 aircraft, connecting India to the world.
With new FDI regime, the sector is going to witness a lot of structural changes and would bring lot many unprecedented and unheard of things in the Industry making it something to be watched. And this being so practicing, the law relating to this sector may be quite a challenging and satisfying professional experience.
Law relating to the aviation sector mainly deals with contracts between aircraft manufacturers (e.g airbus), aircraft buyers (various airlines like Indigo, Indian Airlines or corporations that may be private or government owned). It also deals with aircraft compliance laws, taxation and other regulatory issues pursuant to guidelines issued by organisations in India like DGCA, AERA or AAI.
Aviation laws also deals with sales, purchases, and leases of aircrafts, airline start-ups and mandatory certifications, aircraft finance, aviation privatisation start-ups, aviation insurance, aviation contract matters and disputes and aviation accidents and aircraft crashes disputes.
The Ministry of Civil Aviation (MoCA) is an apex body in the regulatory structure of civil aviation in India. It is charged with the responsibility of the formulation of national policies and programmes for the development and regulation of civilaviation in the country; devising and implementing schemes for orderly growth and expansion of civil air transport; and overseeing the provision of airport facilities, air traffic services, and carriage of passengers and goods by air.
Within its administrative purview lie certain organisations like the Directorate General of Civil Aviation [DGCA], Bureau of Civil Aviation Security [BCAS] and Indira Gandhi RashtriyaUdan Academy [IGRUA] and affiliated Public Sector Undertakings like National Aviation Company of India Limited [NACIL], Airports Authority of India [AAI], Pawan Hans Helicopters Limited and Airports Economic Regulatory Authority [AERA]
DGCA’s office has a vital role in the aviation regulatory framework. It is responsible for the regulation of air transport services to/from/within/over India by Indian and foreign operators, registration of civil aircraft, formulation of air safety and airworthiness standards for civil aircraft registered in India and grant of certificates of airworthiness to such aircraft. -It oversees the licensing of pilots, aircraft maintenance engineers, flight engineers and air traffic controllers. It also coordinates all regulatory functions with International Civil Aviation Organisation (ICAO).
BCAS is the regulatory authority for Civil Aviation security in India. It lays down standards and measures with respect to security in accordance with annex 17 to Chicago Convention of ICAO for airport operators, airlines operators, and their security agencies responsible for implementing AVSEC measures.
The Airports Authority of India (AAI) Act, 1994 provides for the constitution of AAI and the vesting of the airports under AAI. Presently, AAI manages 125 airports in the country including civil enclaves and provides communication, navigation, surveillance and air traffic management [CNS/ATM] facilities at all airports. AAI also manages Indian airspace covering an area of 2.8 million square nautical miles of land mass (1.05 NM2) and the adjoining oceanic area (1.75 NM2) as accepted by ICAO.
Out of the 125 airports managed by AAI, 98 airports are operational (22 airports used only by non-scheduled operators),
AERA is a statutory body constituted under the Airports Economic Regulatory Authority of India Act, 2008. AERA Act received the assent of the President on December 5, 2008 and was notified onJanuary 1, 2009 except for chapter III and VI, which came into force on September 1, 2009.
AERA is an Independent sectorial regulator to regulate tariff for the aeronautical services (i.e. air traffic management, landing & housing, ground safety, ground handling, cargo, fuel Supply services) and to monitor service quality for the major airports.
The Airport Economic Regulatory Authority Appellate Tribunal is established under section 17 of the AERA Act, 2008 to adjudicate any dispute between two or more service providers, between a service providers and a group of consumer and to hear and dispose appeal against any direction / decision / order of the Airport Economic Regulatory Authority
This is an Act to make better provisions for the control of the manufacture, possession, use, operation, sale, import and export of aircraft.
Indian government has made as many as 161 rules covering different aviation aspects including about definitions, appeals, smoking in aircraft, tariff charges and about the aircraft registered in or belonging to foreign state.
These are the civil aviation rules and laws made mandatory by the government of India for all those involved in the civil aviation industry in the country. DirectorGeneral of Civil Aviation is directory responsible to monitor and ensure that these requirements are met with in Indian territory. As per the Hindustan Times, These laws have been divided in eight sections — ‘General’, ‘Air Worthiness’, ‘Air Transport’, ‘Aerodrome Standards and Air Traffic Services’, ‘Air Safety’, ‘Flight Crew Standards, Training and Licensing’ and ‘Aircraft Operations’.
The civil aviation sector in India is currently governed, broadly, by three policies: – the domestic air transport policy, policy on airport infrastructure and greenfield airports policy. The domestic air transport policy removed barriers to entry of private airlines in domestic air transport, the policy on airport infrastructure relates to use and development of airport infrastructure, and the greenfield airports policy lays down the requirements and procedural aspects pertaining to setting up of greenfield airports in the country.
In the past, government policy relating to greenfield airports was restrictive and aimed at protecting the financial viability of the existing airports. However, the spurt in traffic liberalized the approach towards setting up of greenfield airports. The anticipated investment in airport development during the Eleventh Plan is over Rs. 40,000 crores, both from public and private sources, including for greenfield airports.
The long pending FDI proposal for allowing foreign carriers to pick up to 49% stake in Indian airlines is under consideration by government of India has now been finallyapproved which will make the practice in this area an even more challenging and rewarding area of practice.
Civil aviation industry In India is evolving dynamically, and it needs to be further strengthened by reforms and policy initiatives. MoCA is in the process of finalizing a draft National Civil Aviation Policy (NCAP) that would increase foreign direct investment ceiling, liberalize bilaterals and move towards an `open sky,’ encourage the promotion of regional airlines, lower fares to make aviation affordable and remove price monopolies in respect of aviation turbine fuel (ATF). In the scenario of multiplicity of airlines, airport operators (including private sector), and the possibility of oligopolistic practices, the need of the hour is an autonomous regulatory authority, which could work as a watchdog and a facilitator for the aviation sector. It should prescribe and enforce minimum standards for all agencies, settle disputes with regard to abuse of monopoly and ensure level playing field for all agencies. Therefore, a statutory autonomous civil aviation authority (CAA) will be constituted under proposed NCAP.
Indian aviation sector is likely to see clear skies ahead in the years to come. With a CAGR of 18% per annum, the aviation industry will witness rapid expansion in terms of players as well as the number of aircrafts.
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