In this December 2024 edition of our newsletter, we bring you a concise analysis of the rapid growth in India's civil aviation sector, now the world's third-largest domestic market. As the industry evolves to improve connectivity, enhance operational efficiency, and embrace sustainability, we highlight key regulatory changes, major infrastructure approvals, and recent legal precedents that are shaping the future of aviation in India and globally.
We hope this issue offers valuable insights as we continue to track the latest developments and opportunities in this dynamic sector.
A. Key Updates – India
a. Navi Mumbai Airport achieves milestone with first commercial flight test
December 29, 2024 - Navi Mumbai International Airport ("NMIA") successfully completed its first commercial flight test with an IndiGo Airbus A320 landing on runway 08/26. NMIA is set to become India's first airport with multimodal connectivity, integrating various transportation networks. This marks a key milestone as the airport moves closer to full-scale operations with its official opening scheduled for April 17, 2025.
Source: The Economic Times
b. The Directorate General of Civil Aviation ("DGCA") suspends key executives of Akasa Air for lapses in training protocols
December 27, 2024 - DGCA has taken strong action against Akasa Air, suspending its Director of Flight Operations, Captain Floyd Gracious and Director of Training, Niraj Bhatia, for six months each. The suspension follows a regulatory audit conducted in October 2024 which found significant lapses in pilot training procedures.
The audit revealed that Akasa Air had been using an uncertified simulator for training pilots on navigation approaches which is a violation of DGCA regulations. Despite being issued a show-cause notice, the airline's response was deemed unsatisfactory. As a result, the DGCA ordered the suspension of the two senior executives and instructed Akasa Air to nominate suitable replacements for the positions.
Source: Business Today
c. SpiceJet partners with StandardAero to restore grounded Boeing 737-8 MAX fleet
December 20, 2024 - SpiceJet has signed services agreement with StandardAero Inc. for the restoration of its grounded Boeing 737-8 MAX fleet. The deal includes support for the LEAP-1B engines from CFM International with the goal of returning three 737 MAX aircraft to service by April 2025.
Under the agreement, StandardAero will provide comprehensive maintenance, repair, and overhaul ("MRO") services, including engine maintenance, repair, and overhaul as well as performance restoration and quick time shop visits for the LEAP-1B engines. Additionally, CFM International will supply material and support services to ensure the timely restoration of the engines.
This collaboration is central to SpiceJet's broader fleet restoration strategy which also involves resolving disputes with multiple lessors and expanding operational capacity. The return of these aircraft will further support SpiceJet's network expansion and operational efficiency.
Source: SpiceJet Press Release
d. SpiceJet settles INR 160 crore provident fund dues
December 13, 2024 - SpiceJet has cleared pending provident fund dues of INR 160.07 Crore, covering two years, as part of its financial turnaround. Following INR 3,000 Crore Qualified Institutional Placement, the airline has also settled all statutory liabilities, including TDS, GST, and salaries indicating its financial recovery.
Source: SpiceJet, Media Centre
e. Premji Invest and Ranjan Pai Consortium to acquire minority stake in Akasa Air
December 13, 2024 - A consortium led by Premji Invest and Claypond is set to acquire a minority stake in Akasa Air as part of its USD 130-USD 140 million fundraising round. The consortium has committed over USD 100 million with other investors joining to complete the funding.
This deal values Akasa Air at nearly USD 350 million, up from USD 86 million in 2021. The investment will aid Akasa's expansion and aircraft payments. The Jhunjhunwala family will remain the largest shareholder with a 38% stake. The deal is awaiting approval from the Competition Commission of India.
Source: The Times of India
f. Directorate General of Civil Aviation ("DGCA") introduces Electronic Personnel License for Flight Crew
December 9, 2024- DGCA has issued a circular in relation to Electronic Personnel License for flight crew which will be effective from January 15, 2025. This will be initially applicable to new Commercial Pilot Licenses and Flight Radio Telephone Operator Licenses ("FRTOL"), the Electronic Personnel License system allows digital storage and verification of licenses on mobile devices. The move aligns with International Civil Aviation Organization standards and aims to improve safety, efficiency, and cost savings. Existing license holders will continue with hard copies until Electronic Personnel License system expands. The digital license, accessible via the eGCA mobile app can be viewed both online and offline. The introduction of Electronic Personnel License is expected to streamline license verification, reduce fraud, and ensure real-time updates to the license holder's information, enhancing both safety and operational efficiency.
Source: DGCA Official Circular
g. Parliament clears Bharatiya Vayuyan Vidheyak Bill 2024
December 5, 2024 - Rajya Sabha has passed Bharatiya Vayuyan Vidheyak Bill 2024, which replaces the Aircraft Act of 1934. The Lok Sabha had previously passed the bill on August 09, 2024. The new legislation retains most provisions of the Aircraft Act but aims to modernize and strengthen regulations related to the design, manufacture, maintenance, and operation of aircraft, as well as their sale, export, and import.
In addition to these updates, the Bharatiya Vayuyan Vidheyak introduces new offences and penalties. Pertinently, violations such as carrying prohibited items on aircraft, operating aircraft dangerously, or failing to adhere to the Directorate General of Civil Aviation and Bureau of Civil Aviation Security regulations, can now lead to imprisonment of up to 3 years or fines up to Rs. 1 crore. The bill also introduces a second appeal system, allowing decisions made by an Appellate Officer to be further appealed to a higher-ranking Second Appellate Officer.
Source: PRS legislative website
B. Key International Updates
a. Aviation safety under scrutiny after series of incidents worldwide
December 30, 2024 – Aviation safety has come under intense scrutiny after a series of deadly incidents across multiple countries in December 2024. The most catastrophic occurred on December 28, when a Jeju Air flight crashed while attempting to land at Muan Airport in South Korea, killing 179 of the 181 people on board. The crash was caused by a front landing gear failure, triggering a massive fire. Despite efforts from emergency responders only two survivors were rescued.
Other incidents included Azerbaijan Airlines crash on Christmas Day near Aktau Airport in Kazakhstan, killing 38 people, and a private plane crash in Brazil on December 22, which killed ten members of the Galeazzi family. Additional crashes occurred in Papua New Guinea, Hawaii, Argentina, and Scotland, resulting in fatalities and significant investigations into the causes.
While these incidents have raised concerns about aircraft maintenance and operational protocols, they also highlight the need for enhanced safety measures across the global aviation industry.
Source: Business Standard
b. Increase in international air travel liability limits enhances passenger compensation
December 28, 2024 - The International Civil Aviation Organization ("ICAO") has announced an increase in liability limits for air travel under the Montreal Convention 1999 which is effective from December 28, 2024. This adjustment marks the first revision since 2019 and reflects changes in inflation and economic conditions.
The Montreal Convention, formally known as the Convention for the Unification of Certain Rules for International Carriage by Air, has been adjusted for inflation every five years, ensuring that compensation remains relevant. This marks the fourth review since the treaty's inception in 2003.
Key updates to liability limits include:
" Death or Bodily Injury: Increased from 128,821 SDRs to 151,880 SDRs (approximately USD 202,500).
" Delay in Passenger Transport: Rises from 5,346 SDRs to 6,303 SDRs (about USD 8,400).
" Destruction, Loss, Damage, or Delay of Baggage: Increased from 1,288 SDRs to 1,519 SDRs (around USD 2,000).
" Destruction, Loss, Damage, or Delay of Cargo: Rises from 22 SDRs to 26 SDRs per kilogram (about USD 35).
Source: ICAO Release
c. Climate impact X launches standardized carbon credit contracts for airlines
December 12, 2024 - Climate impact X has introduced the first standardized contracts for trading Corsia-eligible carbon credits in the aviation sector. This initiative follows the International Civil Aviation Organization's ("ICAO") approval of six registries to provide credits under the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia).
The contracts aim to address fragmented liquidity and opaque pricing in carbon markets while ensuring transparency through a daily updated list of eligible credits. Airlines are required to offset emissions exceeding 85% of 2019 levels during the first Corsia compliance phase which is 2024-2026.
Source: Climate Impact X website
d. Korean Air completes acquisition of Asiana Airlines
December 12, 2024 - Korean Air has successfully completed its USD 1.3 billion acquisition of Asiana Airlines, securing a 63.88% stake. The deal, which faced regulatory hurdles, makes Korean Air the largest carrier in South Korea and the 12th largest airline globally by international capacity. Asiana will continue to operate as a subsidiary for up to two years before merging fully under the Korean Air brand. The integration will involve the creation of a new low-cost carrier, expanded flight routes, and no layoffs. The acquisition is expected to strengthen the global competitive position of South Korea's Incheon International Airport.
Source: Business Standard
e. International Air Transport Association ("IATA") releases updated Sustainable Aviation Fuel production estimates for 2024 and 2025
December 10, 2024 – IATA reported that Sustainable Aviation Fuel production in 2024 reached 1 million tonnes (1.3 billion liters), double of what has been produced in 2023, which is 0.5 million tonnes (600 million liters). SAF now accounts for 0.3% of global jet fuel production and 11% of global renewable fuel.
However, production is still below than the earlier projection of 1.5 million tonnes due to delays in key US production facilities, with ramp-up expected in the first half of 2025. IATA estimates that SAF production will grow to 2.1 million tonnes (2.7 billion liters) in 2025, representing 0.7% of total jet fuel production and 13% of global renewable fuel capacity.
Source: IATA Press Release
f. Gogo completes acquisition of Satcom Direct and announces leadership changes
December 4, 2024 – Gogo Inc. has completed the acquisition of Satcom Direct for USD 375 million in cash and five million shares. The transaction strengthens Gogo's position as the only multi-orbit, multi-band in-flight connectivity provider, serving global business aviation and military markets. The acquisition is expected to bring USD 25 million to USD 30 million in annual cost synergies over the next two years.
Chris Moore, President of Satcom Direct, has been appointed Gogo's new CEO, succeeding Oakleigh Thorne, who moves to Executive Chair. The deal is also expected to accelerate sales of Gogo's Galileo LEO connectivity system and contribute to the expansion of its customer base.
Source: Gogo Business Aviation
g. Heart aerospace to conduct first fully electric flight in 2025
December 3, 2024 – Swedish hybrid-electric airplane maker Heart Aerospace has announced plans to conduct the first fully electric flight of its Heart Experimental 1 (Heart X1) at Plattsburgh International Airport in upstate New York in 2025. This experimental flight will be a key milestone in the development of Heart's ES-30, a 30-seat hybrid-electric regional aircraft with an all-electric range of 200 km and a hybrid range of 400 km.
Plattsburgh International Airport was selected due to its strategic location and support for next-gen transportation. The experimental flight will validate Heart Aerospace's electric propulsion technology with the company aiming to lower operating costs and stimulate regional air travel. The Heart X1 is currently undergoing critical system tests ahead of the 2025 flight.
Source: Aviation Today
C. Significant developments
a. Central Board of Indirect Taxes and Customs ("CBIC") mandates airlines to share passenger data for risk analysis
December 30, 2024 - Starting April 1, 2025, airlines operating in India will need to submit Passenger Name Records ("PNR") for international travelers to Indian Customs at least 24 hours before departure. This new rule, introduced by the CBIC, aims to improve passenger risk assessments and make customs procedures more efficient. Airlines must register with the National Customs Targeting Centre-Passenger by January 10, 2025. The PNRGOV system will enter a pilot phase by February 10, 2025, with full implementation by April. Airlines using Global Distribution Systems are required to fulfil these requirements by June 1, 2025.
Source: The Economic Times
b. Government amends Aircraft (Security) Rules to curb hoax calls
December 17, 2024 - The Civil Aviation Ministry has amended the Aircraft (Security) Rules 2023 in response to a rise in hoax bomb threat calls, particularly in October. Under the revised rules, individuals making hoax calls about bomb threats will be placed on a no-fly list and fined Rs 1 lakh. If an organization is responsible, the fine could go up to Rs 1 crore. Offenders will also be prosecuted under laws related to severe aviation security violations, such as hijacking attempts or introducing explosives onboard.
The amendments introduce key changes such as empowering Director General of Bureau of Civil Aviation security to instruct airlines to refuse passengers in the interest of security and banning false information that jeopardizes aircraft or airport safety, causing panic or disrupting flights.
Source: The Economic Times
c. Haiti reopens Port-au-Prince Airport amid FAA ban on U.S. flights
December 12, 2024 – Haiti's Toussaint Louverture International Airport in Port-au-Prince has reopened after a month-long closure due to security concerns, despite the U.S. FAA extending its ban on U.S. airlines until March 12, 2025. The FAA had initially barred flights in November after gunfire hit three commercial planes but later allowed flights to northern airports. The Haitian government has enhanced security around the airport calling the reopening a key step for economic recovery. The closure had heavily impacted Haiti's economy, already struggling with gang violence and food insecurity.
Source: Reuters
D. Key Judicial Precedents
a. Delhi High Court rules helicopter supply by Pawan Hans to Andaman & Nicobar Administration not taxable under Central Sales Tax Act, 1956
December 21, 2024 – The Delhi High Court ruled that the supply of helicopters by Pawan Hans Ltd. to the Andaman & Nicobar Administration under a 2003 agreement is not subject to tax under the Central Sales Tax Act, 1956. A division bench of Justices Yashwant Varma and Ravinder Dudeja determined that the agreement did not constitute a 'sale' or a 'transfer of the right to use' as required under Article 366(29A)(d) of the Constitution.
Court while citing State of A.P. v. Rashtriya Ispat Nigam Ltd., ruled that exclusive use by the Andaman & Nicobar Administration did not constitute a transfer of possession or effective control, dismissing tax liability imposed by the Appellate Tribunal under the Delhi Value Added Tax Act. The decision underscores that mere delivery for use does not meet the requirements of Article 366(29A)(d) of the Constitution.
Source: Live Law
b. Delhi High Court summons SpiceJet executives over non-payment of dues
December 16, 2024 - The Delhi High Court has summoned the CEO and COO of SpiceJet Limited to appear in person on January 16, 2025 over non-payment of dues to lessors Team France 01 SAS and Sunbird France 02 SAS. The Court specifically denied the officers' request to appear via video conferencing.
The case arises from an execution petition filed by the lessors, seeking compliance with a consent order directing SpiceJet to pay USD 603,870.82. Earlier, in August, the Court granted specific relief to the lessors by directing SpiceJet to ground three aircraft engines and deliver them to the lessors at their expense due to unpaid dues totalling USD 4.8 million.
The Division Bench had emphasized that preventing the lessors from exercising their contractual rights could result in the loss of both assets and unpaid rental amounts. The Court noted SpiceJet's repeated defaults and breach of interim payment arrangements, underscoring the lessee's contractual obligation to ground the engines upon non-payment.
Source: Live Law
c. IndiGo sues Mahindra Electric over '6E' Trademark Infringement
December 03, 2024 – IndiGo has filed a lawsuit in the Delhi High Court accusing Mahindra Electric of infringing on its trademark by using '6E' for its upcoming electric SUV, the Mahindra BE 6e. IndiGo claims that the use of '6E' by Mahindra which is set to launch in February 2025, could cause confusion, as the '6E' mark is integral to IndiGo's brand and identity.
The airline has used the '6E' mark for its services, including 6E Prime and 6E Flex, for over 18 years and holds trademark registrations for '6E' across several classes. Mahindra, on the other hand, applied to register the mark 'BE 6e' for vehicles in class 12, including electric and combustion-powered vehicles.
IndiGo argues that Mahindra's use of '6E' for its electric vehicle could infringe on the airline's intellectual property and harm its goodwill. The case is currently scheduled for hearing on December 9, 2024, following Justice Amit Bansal's recusal from the matter.
Source: Bar and Bench
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