Govt again relaxes policy for new airline

Air carrier failed to comply with conditions before launch of flight operations

Zafar Bhutta February 08, 2020

ISLAMABAD: The government has given second-time relaxation in its policy by not seizing the security deposit of AirSial, which is expected to receive aircraft this year for launching flight operations.

The airline was awarded a licence for flight operations during the tenure of the previous Pakistan Muslim League-Nawaz (PML-N) government but it failed to comply with the conditions for obtaining the Air Operator Certificate before launching flights.

Officials of the Aviation Division revealed that the Civil Aviation Authority (CAA) had forwarded AirSial's request for the renewal of its Regular Public Transport (RPT) licence with effect from September 5, 2019.

According to the officials, AirSial was issued the RPT licence in 2017, however, the company could not obtain the Air Operator Certificate for the commencement of flight operations within the stipulated time period of two years.

Under paragraph 4.3.1 of the National Aviation Policy (NAP) 2019, "if an operator including the Regular Public Transport or non-Regular Public Transport fails to obtain Air Operator Certificate within a maximum of two years' time frame from the date of issuance of respective licence, then 10% of the total security deposit will be levied as non-conformance charge. Subsequently, a fresh licence has to be applied while its remaining security deposit shall be refunded."

Officials said the CAA had provided the cabinet with the details of efforts made by the airline to meet regulatory requirements and acquire aircraft by finalising a Letter of Intent (LOI) with AerCap.

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The air carrier has also provided a copy of confirmation letter from AerCap Ireland Limited for the lease of three Airbus A320 aircraft with delivery expected in April and May 2020.

AirSial has a paid-up capital of Rs2.2 billion against the requirement of Rs300 million. It intends to increase the paid-up capital to Rs2.8 billion shortly.

Its board of directors comprises members of the Sialkot business community. At present, the airline has 46 employees while recruitment of 654 more people is under way.

Previously in January 2019, the federal cabinet had given a one-off relaxation in the then National Aviation Policy (NAP) 2015 by not seizing the security deposit of AirSial and renewing the licence for one year.

Any subsequent relaxation in the policy is the prerogative of the federal government.

The Aviation Division had sought approval of the government for waiving 10% of the non-conformance charge on AirSial for not acquiring the Air Operator Certificate within the allowed time frame and for processing the RPT licence renewal in light of delegation of powers approved by the federal government.

The cabinet considered the summary titled "Approval of the cabinet for relaxation in policy for not forfeiting the security deposit of AirSial", submitted by the Aviation Division, and approved the proposal.

Published in The Express Tribune, February 8th, 2020.

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