WHEN IS AN AIR OPERATORS CERTIFICATE SUSPENDED / CANCELLED BY THE INDIAN DGCA

WHEN IS AN AIR OPERATORS CERTIFICATE SUSPENDED / CANCELLED BY THE INDIAN DGCA

By

Nitin Sarin

Managing Partner

Sarin & Co.

18th April 2019

With the current Jet Airways situation, there have been a number of queries regarding suspension and cancellation of a scheduled operators Air Operators Certificate (herein after referred to as “AOC“). This short note is aimed to give you a brief gist of what the rules and regulations state regarding suspension / cancellation of AOC’s / AOP’s. Do however please note that this is dealt with by the Aircraft Rules, 1937 and the relevant Civil Aviation Requirements (“CARs“) issued by the Directorate General of Civil Aviation in India. We will deal with these one by one:

  1. Aircraft Rules, 1937:

Under Schedule XI of the Aircraft Rules, 1937, the Director General (herein after referred to as the “DG“) may for reasons to be recorded in writing, cancel an operators AOC or suspend it for such periods of time as he may think fit.

Further, the DG may take the above action if he is satisfied that:

(i) Conditions of the grant of the AOC are not complied with;

(ii) The holder of the AOC has failed to establish a safe, efficient and reliable service;

(iii) That having regard to the financial resources of the holder of the AOC or the losses incurred by him, he cannot be relied upon to continue the operation of the service in a safe, efficient and reliable manner;

(iv) That such substantial changes have taken place that it is no longer in public interest or in the interest of safety to have the AOC holder continue.

Further, the DG, before taking any action shall give no less then 15 days written notice to the AOC holder specifying the grounds upon which it is proposed to cancel or, as the case may be, suspend the AOC. Further an opportunity of hearing shall also be granted to such AOC holder.

The DG has the power to summarily suspend the AOC (but not cancel) without the aforementioned notice period if he thinks it expedient in the interest of public safety and may carry on further enquiry or take any action against the AOC holder.

The AOC holder, whose AOC has been cancelled or suspended, may within a period of 30 days from the date of such order, appeal to the Central Government – such decision in appeal shall be final.

  1. CAR:

CAR Section 2 – Air Transport Series C Part II inter-alia states that an operator shall comply with the requirements of any new rules or regulations promulgated from time to time for scheduled air transport services. Further, the CAR states that any violation of the applicable regulatory provisions i.e. the Aircraft Act, 1934, the Aircraft Rules, 1937 or the CAR’s as amended from time to time shall invite disciplinary action including but not limited to alteration, suspension or cancellation of the AOC.

Conclusion:

To conclude, it is safe to say that the DGCA may suspend an AOC immediately (without notice) however, cancellation can happen only if 15 days notice is given to the AOC holder (and if an opportunity of being heard is given to such AOC holder). The usual practice (as was done with Kingfisher Airlines) is that the DGCA issues a notice to the AOC Holder to show cause why the AOC should not be cancelled or suspended. This is usually followed by suspension of the AOC and concluded with cancellation of the AOC. Do note though that suspension before cancellation is not mandatory but is usually the procedure followed in the past.

It is anyone’s guess as to what the DGCA will do in the present Jet Airways scenario.

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