Data secured from the civil aviation ministry under the Right to Information Act shows that the ministry received 20 applications and it granted NOCs to sixteen companies between 2009 till now.
The sixteen companies include Vistara and six other companies (Zexus Air Services, Air One, Premier Airways, Turbo Megha, Air Carnival and Zav Airways) who were granted NOC in 2014.
Securing a no objection certificate is the first step towards launch of scheduled airline and companies need to secure a permit from the Directorate General of Civil Aviation to start operations upon receiving the initial clearance from the ministry.
The NOC is valid for eighteen months and is issued for both regional or national operations. While AirAsia holds a national permit, Air Costa has a permit for regional operations.
Ministry data shows that ministry extended validity of of NOC of three companies. It also reveals that NOCs granted to three companies lapsed as the companies failed to take steps to obtain a permit during the 18 month period. However the companies applied for NOCs afresh and one of the them has secured the NOC again.
Aviation experts say a mix of reasons including financial crunch of promoters, inability to comply with the technical requirements make it difficult for companies to secure permit. Entry barriers and rules on import of five aircraft in a year for licence validity and route dispersal guidelines which make it mandatory to fly on certain regional routes are also seen as handicaps.
Kapil Kaul of Centre for Asia Pacific Aviation said “ Receiving of a NOC does not mean a company can start operations. Lack of funding and inadequate knowledge of the aviation sector makes it difficult for companies to secure operations permit. The conversion of a NOC to an operations permit is an increasingly complex and strict process and can take upto a year and in certain cases more than a year. We see Air One and Premier Airways getting operational in a year. Market conditions continue to remain hostile and new start ups need very strong levels of capitalisation.''
“DGCA checks whether companies applying for permit has the management set up, infrastructure at key bases and financial ability. It also approves also safety and operations manuals. Companies at times do not go forward with their plans as they are unable to raise capital. The start up costs of an airline are high and companies can require upto Rs 100 crore in start up capital,'' said Shakti Loomba, IndiGo's former head of operations.
