Aviation Law in India

I. Aviation is primarily guided by the following laws

1) The Aircraft Act, 1934 and Rules, 1937
These govern the manufacture, possession, use, operation, sale, and the import and
export of aircrafts. These also lay down provisions for maintenance of aircrafts,
registration of aircrafts, determining airworthiness, general conditions for flying and
safety and conduct of investigations.
2) The Aircraft (Carriage of Dangerous Goods) Rules, 2003
This stipulates rules for carriage of dangerous goods like radioactive material,
explosives etc. It also deals with screening of passengers, their baggage and cargo.
3) The Air Corporations Act, 1953
Provides for establishment of Indian Airlines and Air India International and rules as
to acquisitions by such air corporations.
4) The Airports Authority of India Act, 1994 ("AAI Act") and Rules
Provides for establishment of Airports Authority of India which is vested with the
authority over airport infrastructure. Vests the AAI with the mandatory function of
managing the airports, civil enclaves, aeronautical communication stations, eviction
of unauthorised occupants of airport premises and to provide air traffic services and
air transport services at any airport or civil enclave.
5) The Anti-Hijacking Act, 1982
It provides for punishment for the offence of hijacking an aircraft. It built on the lines
of Anti-Hijacking Act implements the Convention for the Suppression of Unlawful
Seizure of Aircraft.
6) The Airports Economic Regulatory Authority of India Act, 2008 ("AERA Act")
AERA regulates tariffs and other aeronautical charges, as well as monitors airport's
performance standards. The Act also established the Appellate Tribunal which
adjudicates disputes between the service providers inter se or between service
providers and consumer groups.
7) The Carriage by Air Act, 1972
The Act to provide for the Warsaw Convention on the laws relating to international
carriage by air, which affixes liability for international carriage of persons, luggage or
goods performed by aircraft for reward.
8) The Tokyo Convention Act, 1975
The Act gives teeth to the penal law to be applied over the crimes done Indian-
registered aircraft when over the territory of any other country.
II FDI Cap in Air Transport Services
1 Airports
Sector/Activity % of Equity/ FDI Cap Entry Route
(a) Greenfield projects 100% Automatic
(Those start from scratch
and don’t involve any
demolishing of any
previous building)
b) Existing Projects 100% Automatic
2 Air Transport Services
Sector/Activity % of Equity/ FDI Cap Entry Route
(1) (a) Scheduled Air 100% Automatic up to 49%
Transport Service/ Domestic (Automatic up to 100% for
Scheduled Passenger Airline NRIs) Government route
(b) Regional Air Transport beyond 49%
Service

(2)Non-Scheduled Air 100% Automatic

Transport Services

(3)Helicopter 100% Automatic

services/seaplane services
requiring DGCA approval

3 Other services under Civil Aviation sector

Sector/Activity % of Equity/ FDI Cap Entry Route
(1)Ground Handling Services 100% Automatic
subject to sectorial regulations
and security clearance

(2)Maintenance and Repair 100% Automatic

organizations; flying training
institutes; and technical
training institutions.
Other Conditions
1) Foreign airlines are allowed to participate as well
2) Foreign airlines are also allowed to invest in the capital of Indian companies, operating
scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-
up capital. Such investment would be subject to the following conditions:
- The 49% limit will subsume FDI and FII/FPI investment.
- All of it shall be subject to the government and SEBI rules.
- All technical equipment that might be imported shall require a clearance from the
relevant authority in the Ministry of Civil Aviation.
- A Scheduled Operator’s Permit can be granted only to a company:
a) that is registered and has its principal place of business within India;
b) the Chairman and at least two-thirds of the Directors of which are citizens of
India;
c) The substantial ownership and effective control of which is vested in Indian
nationals.
- All foreign nationals likely to be associated with Indian scheduled and non-scheduled
air transport services, as a result of such investment shall be cleared from security
view point before deployment.

III Compliance and Regulatory rules

1) The operator shall regularly submit to DGCA, information relating to their

operational, engineering, and commercial and financial performance.
2) The operator shall get his flight schedules approved by DGCA at least 30 days in
advance and operate services in accordance with the flight schedules so approved.
3) The scheduled operators shall issue passenger tickets in accordance with the
provisions of the Carriage by Air Act, 1972. The tickets shall stipulate the
conditions of carriage including the liability of the operator.
4) The applicant may, with the approval of the competent authority, acquire suitable
aircraft within the country, on purchase/ lease for operation of services.
5) Degradation of the operator's capability below the required level or breach of any
of the requirements of relevant provisions of Aircraft Act, 1934, Aircraft Rules,
1937, Civil Aviation Requirements, orders/ directions/requirements shall render the
Operating Permit liable to alteration, suspension or even cancellation. Before
 deploying any aircraft for operations, it ought to be endorsed on the Permit, this
permit is non- transferrable.
6) The Ministry of Civil Aviation and the DGCA will approve via a security clearance
the people to be appointed as Chairman or Director.

Bibliography
1. FDI Policy of 2017, Available at:
http://dipp.nic.in/sites/default/files/CFPC_2017_FINAL_RELEASED_28.8.17.p
df
2. The Aircraft Act, 1934 and Rules, 1937
3. The Aircraft (Carriage of Dangerous Goods) Rules, 2003
4. The Air Corporations Act, 1953
5. The Airports Authority of India Act, 1994 ("AAI Act") and Rules
6. The Anti-Hijacking Act, 1982
7. The Airports Economic Regulatory Authority of India Act, 2008 ("AERA Act")
8. The Carriage by Air Act, 1972
9. The Tokyo Convention Act, 1975