Published on Sat, Jan 20, 2007 at 09:59 | Source : Moneycontrol.com
Updated at Sat, Jan 20, 2007 at 11:26
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Govt tightens norms for airline operations
The Government has revised the norms for airline operations in the country by increasing the subscribed equity capital required for setting up a scheduled airline with five large aircraft from the existing Rs 30 crore to Rs 50 crore.
The rules have also been revised for smaller aircraft. Consequently, the subscribed equity capital for an airline with a fleet of five aircraft weighing less than 40,000 kilograms each has been doubled to Rs 20 crore. Such airlines would also have to pump in Rs 10 crore into their equity capital for every five aircraft inducted. While the larger aircraft like the Boeing 737 and Airbus A-320 aircraft have a weight of more than 40,000 kg, smaller aircraft like Dornier and ATR have a weight of less than 40,000 kg.
'The rule will apply to all existing operators. Those who do not comply with the rule immediately will have to do so within a year. The rules have been amended as no changes have been affected for several years and also because this is a capital intensive industry,' a senior Government official told Business Line.
The stipulation of having a subscribed equity capital of not less than Rs 30 and Rs 10 crore was implemented on March 1, 1994.
