DGCA Draws SC Ire on Li­cens­ing Pol­icy

SC, hear­ing a plea on Delhi-Shimla flight, asks reg­u­la­tor why only AI was be­ing made to serve non-prof­itable sec­tors

The Economic Times - - Companies - Sa­man­waya.Rau­tray@ times­group.com

New Delhi: The Supreme Court on Tues­day asked whether lu­cra­tive sec­tors were be­ing handed out as “largesse” to pri­vate air­lines to the detri­ment of state-run Air In­dia.

It threat­ened an au­dit of li­cens­ing poli­cies to find out why the na­tional car­rier was mak­ing losses un­less the gov­ern­ment en­sured that pri­vate air­lines flew on routes that weren’t lu­cra­tive as man­dated un­der the rules.

The court was hear­ing a pe­ti­tion seek­ing a Delhi-Shimla flight, which the avi­a­tion min­istry has been re­sist­ing on the grounds that the air­field was small and that Air In­dia didn’t have planes of the right size.

The bench com­pris­ing chief jus­tice TS Thakur and jus­tice R Banu­mathi threat­ened the Direc­torate Gen­eral of Civil Avi­a­tion (DGCA) with an au­dit by for­mer comptroller and au­di­tor gen­eral Vinod Rai.

Un­der route dis­per­sal guide­lines, all pri­vate air­lines have to con­nect not-so-prof­itable routes as well. But most leave the task to the na­tional car­rier, caus­ing it huge losses, the court had ob­served ear­lier.

Ap­pear­ing for DGCA, ad­di­tional so­lic­i­tor gen­eral PS Pat­walia ini­tially sought more time from the court to al­low the reg­u­la­tor to re­visit route dis­per­sal guide­lines to deal with lack of con­nec­tiv­ity to ar­eas such as Shimla.

How­ever, he later urged the court not to di­rect an au­dit by Rai. DGCA had no “skele­tons” in its cup­board and noth­ing would come of such an in­quiry, he said, seek­ing another op­por­tu­nity to ad­dress Shimla’s lack of con­nec­tiv­ity.

Thakur was re­luc­tant to grant him time, but de­ferred pass­ing any or­der di­rect­ing Rai to au­dit DGCA guide­lines till April 22.

“You are just promis­ing to re­visit the guide­lines. You have not done any­thing,” he ob­served. “These air­lines are not both­er­ing on the not-solu­cra­tive routes. You are not in­sist­ing on it. You are giv­ing the lu­cra­tive routes with­out in­sist­ing that they carry out their con­comi­tant obli­ga­tions to cover the not-so-lu­cra­tive sec­tors.”

Thakur’s state­ments on the mat­ter were forth­right.

“You need some­one to call your bluff. This is a bluff. We need some­one who will call your bluff. Peo­ple are suf­fer­ing be­cause you are look­ing af­ter op­er­a­tors’ eco­nomic in­ter- ests and not the peo­ple’s in­ter­ests,” he said. “Is it not the obli­ga­tion of your pol­icy to take care of the in­ter­ests of Shimla? You have not done it.”

Pat­walia’s de­fence that many poorly con­nected des­ti­na­tions had been cov­ered by air ser­vices didn’t ap­pear to sat­isfy the bench. “We want re­sults,” Thakur said. “We don’t want dilly-dal­ly­ing tac­tics. There are a lot of skele­tons in your cup­board. Let them all come out. It is time to open the process up to scru­tiny.”

The law of­fi­cer de­nied this, say­ing the guide­lines were trans­par­ent and be­ing im­ple­mented strictly.

Air In­dia has been in­sist­ing that it will fly the route if the state gov­ern­ment sub­sidised its losses, whereas pri­vate air­lines have re­fused to do so.

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