DGCA halts Deccan's inter-city flights

The grand plan to connect Gujarat's cities by air has developed a snag even as hoardings have appeared all over Gujarat towns and cities announcing the launch shortly. Deccan Charters Ltd (DCL), which charted out air connectivity of Gujarat towns with Ahmedabad and Surat as twin hubs, has been told that the lease agreements under which the aircraft had been procured were not acceptable to the Director General of Civil Aviation. The inter-city flights were initially scheduled for launch by April-end but the matter could not be resolved even after a late evening meeting between DCL chief Capt G R Gopinath and senior aviation officials in New Delhi on Wednesday. Sources close to the developments said the airline had got three 60-seater aircraft on 'wet lease' for three months from Denmark, but the planes remain parked in Muscat pending DGCA's clearance for flying them into India. 

Apparently, the rules do not allow an airline to operate aircraft sourced on 'wet lease' — an arrangement where an airline provides aircraft, crew, maintenance, and insurance cover to another airline (lessee), which pays the lessor on basis of number of hours of operations. The lessee covers fuel, airport fees, and other duties etc. Import of aircraft on wet lease are permitted in India in exceptional cases and not to run a full-fledged airline under the garb of running daily but non-scheduled flights. DGCA chief E K Bharat Bhushan told TOI, "There are certain conditions which have to be met under the country's aviation norms." Sources further said clearance was possible only if the company was forced to switch over to a 'dry lease', where only the aircraft is provided by the lessor. Surprisingly, sources said, the DGCA had initially recommended to DCL to get non-scheduled flights cleared from the aviation ministry. It was only later that the rule book was shown to them. 

Capt Gopinath told TOI after Wednesday meeting, "We have been asked to make some technical changes with regard to the procurement of the aircraft and we are hopeful we will get the clearances in a month's time." Capt Gopinath had founded India's first low-cost carrier Air Deccan in 2003, which Kingfisher Airlines took over in 2007. Capt Gopinath had signed a five-year no-competition clause when he sold stake to Kingfisher's Vijay Mallya, which ends in 2012. 

The contract does not allow him to launch a scheduled flight. If DCL were to change the lease agreement, industry sources doubt whether he would be able to competitively price tickets ranging between Rs 2,500 and Rs 3,000 as the new deed will invite higher taxes.