GCAA’s draft legislation causes concern
UAE’s aviation body contemplates a ban on planes over 25 years old, prompting alarm among cargo airlines.
Air cargo companies are up in arms over the UAE General Civil Aviation Authority’s (GCAA’s) plans to introduce a ban on planes over the age of 25 years.
Several airlines claim the proposed legislation will dramatically increase the cost of leasing and owning cargo aircraft. Companies will now have to start looking at more modern aircraft to run their businesses.
David J. Vander, former deputy general manager for Al Rais Cargo, said: “If the new legislation goes ahead it will cause a huge impact on cargo in the UAE. Not only will it cost businesses more to update their aircraft but it may have a large impact on cargo prices for the customer within the UAE.”
Vander added that UAE companies would face tough competition from charter companies outside the region where the law does not apply.
Ahmed Al Haddabi, GCAA’s deputy director general, told Air Cargo that nothing had been finalised as to the minimum or maximum age but that a decision would be made shortly.
He said: “The safety program for ageing aircraft is currently under review. We are looking at several options to increase aviation safety.”
The legislation is expected to come into force in 2007 and will apply to cargo and passenger aircraft. According to an inside source, who preferred not to be named, Sharjah will be the worst effected area as more than ten small cargo operations are headquartered within the airport.
Charter companies with Soviet-made aircraft are likely to be hit the worst. Planes that would probably be outlawed under the proposed legislation include the llyushin 76, Antonov 12, DC8 and the llyushin 18.
The source said: “Not only will companies have to pay more for modern aircraft but they are also loaded differently. Many of the old planes are bulk loaded whereas today’s aircraft use palletised high loaders. It will take time to adjust.”
Sunlight Airlines, which operates three Antonov 12s and will be taking delivery of its fourth in May, looks set to be hit hard by the legislation. Philippe Aramyan, Sunlight’s director general, said: “Since the beginning of the year we have had a back up plan of going elsewhere for aircraft.” Aramyan declined to comment further.
Although airlines’ operating costs may rise, with smaller companies suffering the consequences, several other larger businesses said they will prosper from the new law.
Deepika Gupta, assistant manager for commercial sales for Air Charter International, said: “The legislation will lead to less variety within the cargo sector, which in turn will pull customers towards companies with modern fleets. I believe Air Charter will see an increase in sales when the new law is passed.”
Although the legislation will certainly have an impact on air cargo operations, there could be benefits. With oil prices continuing to rise, it has become increasingly expensive to run older planes like the Soviet-made ones, which are more fuel hungry than more modern aircraft. Although aircraft manufactured by Airbus and Boeing cost a lot more to acquire or lease, lower long term operating costs could make up the difference in purchase price, according to one senior airline executive.
A further benefit is that the law would make air cargo in the UAE more competitive, raising standards and increasing productivity. Although it could make life tough for the airlines affected by the law, it could help the UAE’s air cargo industry as a whole stay ahead in terms of technology and standards.