Aviation ministry seeks legal view on SWISS, Austrian issue

New Delhi: The civil aviation ministry has asked for the views of the law ministry on the replies of Swiss International Airlines (SWISS) and Austrian Airlines, owned by German carrier Lufthansa, on their ownership issue.
India had raised objections to the operations of these airlines on the ground that they had violated the substantial ownership and effective control (SOEC) clause mandated under the bilateral air services agreement between the countries. India had threatened to stop all their services stating the ownership of the airlines were not from their respective countries.
Lufthansa had acquired SWISS in 2005 and Austrian in 2009. The former has been operating in India since 2005, while the latter since 2010.
“The airlines have said they are owned by trusts based out of their respective countries. It has become a legal issue now, and we are awaiting the opinion of the law ministry,” said a senior ministry official, seeking anonymity.
He said the government would look into the details of the trusts to ascertain their ownership. “Not only the country of origin of the trusts, but also the country of origin of their members needs to be looked into. We will seek the external affairs ministry's view,” he said.
According to the SOEC clause, any airline can only utilise the seats quota of a particular country f the airlines’ ownership is from that country. The government also has the right to designate one or more airlines; however, its substantial ownership and effective control should be vested in the party designating the airline.
17/11/11 Mihir Mishra /Business Standard

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Categories: Foreign Nov 2011