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Ownership and control of AirAsia India lies with India nationals: DGCA to Delhi HC

LiveMint logoLiveMint 23-02-2017 Priyanka Mittal

New Delhi: The Director General of Civil Aviation (DGCA) on Friday told the Delhi high court that the ownership and control of AirAsia India vests with Indian nationals.

DGCA made the submission after the court directed it in November to conduct an inquiry into the issue of AirAsia India granting operational control to a foreign company—a charge which has been denied by AirAsia.

For this purpose, the court had asked AirAsia India to submit the brand licensing agreement (BLA) operating between AirAsia India and AirAsia Bhd to DGCA.

“Based on review of the BLA along with provisions of Aircraft Rules,1937 and definition of control under FDI rules, I do not find that the terms and conditions laid down in the BLA dilute the substantial ownership and effective control of AirAsia India being vested with India nationals,” said the report by the DGCA which Mint has reviewed.

The BLA was signed between AirAsia India and the foreign airline partner AirAsia Bhd, Malaysia’s largest low-cost airline, in April 2013.

The Federation of Indian Airlines (FIA), which represents IndiGo, Jet Airways, GoAir and SpiceJet, along with BJP leader Subramanian Swamy, had brought a case challenging the licence granted to AirAsia India, claiming it was fraudulently obtained. They had sought immediate suspension of the licence.

It was alleged that according to the BLA, day-to-day operations of the airline were controlled from Malaysia, violating the substantial ownership and effective control norms.

Tarun Shukla contributed to the story.

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