Govt Offers Special Treatment to New Airline, Waives Huge Penalty

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

Sources said that Civil Aviation forwarded the request of M/s Air Sial for renewal of its Regular Public Transport (RPT) license with effect from September 5, 2019. It was further informed that Air Sial was issued an RPT license in 2017, however, the company could not obtain an Air Operator Certificate (AOC) to start flight operations within a stipulated period of two years.


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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 from the date of issuance of the respective license, then a 10 percent of the total security deposit will be levied as non- conformance charge. Subsequently, a fresh license 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 aircraft by finalizing the Letter of Intent (LoI) with AerCap. The company has also provided a copy of confirmation letter from AerCap Ireland Limited for the lease of 3 Airbus A320 aircraft and expected deliveries during April and May 2020.

The company had paid-up capital of Rs. 2.2 billion against the requirement of Rs. 300 million. The company intends to increase the paid-up capital to Rs. 2.8 billion soon.

The Board of Directors of the company comprises members from the Sialkot business community. Presently, 46 employees have been recruited while recruitment of 654 employees is under 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 license 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 percent non-conformant charges on M/s Air Sial for not acquiring AOC within the allowed timeframe” and to process RPT license 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.


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