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India eases aircraft leasing terms to boost IndiGo

Draft regulations from India's aviation regulator show that the requirement that airlines only lease planes with crews in emergency situations is being removed. This could help carriers cope better with any aircraft shortages.

The proposed rules may help airlines such as India's largest carrier IndiGo, which took two planes and crews on a so-called "wet lease" from Turkish Airlines. This allowed it to provide connectivity between flights in Europe and the United States.

Air India has been irritated by the partnership. It unsuccessfully tried to lobby the Indian government to stop it. They argued that it would give more air traffic in Turkey and harm India's aviation industry.

According to the regulations of the Directorate General of Civil Aviation, airlines were only allowed to lease aircraft in emergencies such as when an unexpected grounding of an aircraft occurred.

Lawyers said that the new draft proposal replaces "only" with "normally", potentially making it easier to process such requests.

Lovejeet Sing, a specialist in aviation law and partner at Chandhiok & Mahajan, said that this added flexibility would be crucial in easing the capacity constraint, particularly in light of limited availability of larger aircraft.

The proposal was not reported before it appeared on the DGCA website. The proposal is open to public consultations through October 28.

IndiGo and the DGCA did not answer questions about planned regulatory changes.

IndiGo's Turkish partner has been criticized in India over the past few months, after Turkey supported Pakistan in the recent India-Pakistan war.

The Indian government initially said that it would not extend the lease. However, in August it reversed course without providing any reason for IndiGo to continue.

The new draft rules say that the watchdog may exempt this requirement for a single time. (Reporting and editing by Abhijith Ganahapavaram, Aditya Kalra, and Ros Russell).

(source: Reuters)