The government is reviewing the regulatory framework to streamline the entry of new carriers into Indian skies.
The Civil Aviation Ministry is examining the Directorate General of Civil Aviation (DGCA) approval process to reduce the time taken for launching new airlines in India . While the government has shown enthusiasm for encouraging new players, the current reality is that securing an Air Operator Certificate (AOC) remains a lengthy and complex journey for most aspirants .
The Current Bottleneck
Despite several startup airlines receiving No-Objection Certificates (NOCs) from the ministry in 2024, none have commenced operations . The key issue lies not in the initial clearance but in the subsequent stages of the approval process.
NOC Is Not Takeoff
An NOC is merely the first regulatory step—it permits a company to begin the formal process of setting up an airline but does not allow it to fly, sell tickets, or commence operations . To actually launch, airlines need two critical components:
Aircraft (purchased or leased)
Air Operator Permit (AOP) from the DGCA
The Aircraft Leasing Roadblock
The most significant hurdle for startup airlines has been securing aircraft. Lessors remain cautious about backing new entrants without strong financial assurances .
What Lessors Demand
Aircraft lessors typically evaluate three key factors before committing aircraft:
A credible and detailed business plan
An experienced management team
Reliable access to capital
For startups without an operating history, raising capital upfront is extremely difficult. Lessors are reportedly demanding:
Around ₹100 crore as security deposit
Proof of nearly ₹500 crore in bank guarantees
The Regulatory Challenge
The DGCA approval process itself has multiple layers. Foreign airlines seeking to operate in India must obtain specific operating authorisation, even if services are permitted under bilateral agreements .
Current Requirements for Foreign Airlines
Formal designation by their home government
Registration on the DGCA’s e-Governance of Civil Aviation (eGCA) portal
Submission of key documents including Air Operator Certificate (AOC) and company registration
Appointment of a local representative in India
Submit application at least 90 days prior to proposed start of services
The Digital Push
The government is working on digitalising the approval process to enhance efficiency. The eGCA platform, launched in 2021, now delivers over 300 services and is designed to streamline regulatory processes .
Proposed Changes
Draft rules from DGCA propose:
A fully digital approval system for foreign airlines
Standardised documentation requirements
Appointment of a local representative as a formal requirement
The Broader Challenge
While regulatory streamlining is welcome, industry experts note that the challenges facing new entrants remain structural. India does not lack aspiring airlines but it faces a shortage of aircraft access, capital, and lessor confidence .
The caution among lessors is rooted in recent history—during Go First’s bankruptcy, aircraft lessors were locked in prolonged legal battles, reinforcing the perception that leasing aircraft to Indian startups carries heightened risk .
What This Means for Aspiring Airlines
If you’re considering launching an airline in India, here’s what you need to know:
The NOC is just the beginning—be prepared for a long journey ahead
Aircraft acquisition is the main hurdle—have a clear plan for leasing or purchasing
Financial strength is non-negotiable—lessors require substantial proof of funds
The DGCA process requires patience—compliance with all regulatory requirements takes time
Conclusion
The Centre’s examination of the DGCA approval process is a positive step toward simplifying airline launches in India. However, the challenges facing new entrants extend beyond regulatory paperwork. Structural issues around aircraft access, capital requirements, and lessor confidence must also be addressed for India to see real competition in its skies.
Stay tuned to Aviators360.com for more updates on India’s evolving aviation landscape.