AOC for RPT licence: Cabinet has waived 10 percent penalty on Air Sial

The Federal Cabinet has waived penalty of 10 per cent non-conformance on M/s Air Sial for not acquiring Air Operator Certificate (AOC) within the allowed timeframe meant to process Regular Public Transport (RPT) licence.

Well informed sources told Business Recorder that Civil Aviation forwarded the request of M/s Air Sial for renewal of its Regular Public Transport (RPT) licence with effect from September 5, 2019. It was further informed that M/s Air Sial was issued RPT licence in 2017, however, the company could not obtain Air Operator Certificate (AOC) for commencement of flight operations within stipulated period of two years.

Under para 4.3.1 of the National Aviation Policy (NAP) 2019, " if an operator (RPT/ non-RPT) fails to obtain AOC within a maximum of two years' timeframe from the date of issuance of respective licence, then a 10 per cent 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."

It was submitted that CAA has provided details of efforts made by the company to complete regulatory requirements and to acquire aircrafts by finalizing Letter of Intent (LoI) with M/s AerCap. The company has also provided a copy of confirmation letter from M/s AerCap Ireland Limited for lease of 03xAirbus A320 aircrafts and expected deliveries during April and May, 2020.

According to sources, the company had a paid-up capital of Rs 2.2 billion against requirement of Rs 300 million. The company intends to increase the paid up capital to Rs 2.8 billion shortly.

The Board of Directors of the Company comprises members from Sialkot business community. Presently, 46 employees have been recruited while recruitment of 654 employees is in process.

Previously in January 2019, the Federal Cabinet allowed one-time relaxation in the then NAP-2015 for not forfeiting the security deposit of M/s Air Sial and renewal of licence for one year. Any subsequent relaxation in the policy is, therefore, the prerogative of the Federal Cabinet.

Aviation Division sought the approval of the Federal government to the "waiver of levy of 10 per cent non-conformant charges on M/s Air Sial for not acquiring AOC within the allowed timeframe" and to process RPT licence renewal case in the light of delegation of powers approved by the Federal Cabinet on October 29, 2019.

After a brief discussion, the Cabinet in its meeting held January 14, 2020 approved the proposal of Aviation Division.