“Gov­ern­ment won’t bail out pri­vate air­lines”

India Today - - SPE CIAL REPORT -

“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.

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