“Government won’t bail out private airlines”

“The purported letter ( written by Bharat Bhushan) was drafted on a piece of plain paper.”

Civil Aviation Minister Ajit Singh, 73, has been embroiled in a controversy triggered by former DGCA E. K. Bharat Bhushan’s noting, raising doubts about the safety of Kingfisher Airlines. Bhushan was removed as DGCA on July 10, within a week of being given extension till November 2012. Singh spoke to Senior Editor DEVESH KUMAR on Bhushan’s charges and challenges his ministry faces.

Q. There is a perception that the civil aviation ministry is bailing out Kingfisher Airlines. Former DGCA Bharat Bhushan’s noting on the financial surveillance of the airline lends credence to the suspicion.

A. We made it very clear that the Government will not bail out any private airline. When the Kingfisher management cut down the number of their daily flights from 340 to 120, DGCA investigated their condition and gave them a clean chit in May. The ministry wrote to the DGCA in June that the airline’s safety issues should be investigated. The purported letter ( written by Bharat Bhushan) was drafted on a piece of plain paper. Where is the despatch number? All notings and letters are routed through a process.

Q. But there are allegations that the ministry overlooked Kingfisher’s financial health to allow it to continue flying.

A. According to rules, if an airline has five operational aircraft and a certain amount of equity, its licence cannot be cancelled unless there are safety issues.

Q. What about the mental state of pilots and engineers of Kingfisher Airlines who haven’t been paid salaries?

A. DGCA has been doing a special audit of Kingfisher on maintenance of its aircraft. The idea is to ensure safety of the aircraft. As far as stress of pilots and engineers is concerned, I’m sure the management will eventually clear their dues.

Q. You joined the civil aviation ministry at a critical juncture. Kingfisher Airlines was floundering, Air India’s woes had aggravated and, soon after, its pilots went on strike.

A. The aviation sector was in crisis across the world. The Union Cabinet approved a turnaround plan for Air India with a Rs 30,000- crore bailout package on April 12. Three months before its pilots went on strike on May 7, Air India’s revenues had gone up by 35 per cent, yields had increased. After Air India’s merger with Indian Airlines, promotions of employees had been held in abeyance. The management has set in motion the process to resume the promotions.

Q. Do you think allowing foreign airlines to buy a stake in Indian aviation companies will help inject the much- needed capital?

A. If India has to grow into an aviation hub, we will need the expertise, both technical and managerial, of foreign airlines. Why shouldn’t foreign airlines be allowed to buy 49 per cent stake in Indian companies?

Q. The last few years saw a dramatic growth in the domestic aviation sector. Growth has now halted, and most low- cost airlines have folded up.

A. Aviation Turbine Fuel ( ATF) comprises about 45 per cent of the operational costs of an airline. Our ATF costs 60 per cent more than in neighbouring countries. Service tax is also being imposed. We have now allowed the import of ATF. We are planning to expand air connectivity by promoting feeder airlines to connect Tier 3 and Tier 4 cities such as Bareilly and Azamgarh.