New civil aviation minister Ajit Singh says Air India will be saved but must realise it is in a service industry. He also tells Mihir Mishra & Kavita Chowdhury that private carriers should be allowed to ply abroad if there are unused country rights and he would not discriminate on safety rule enforcement between a state airline and a private one. He’s also for more private participation in establishing airports. Edited excerpts:
What are the major issues with the sector and how do you plan to resolve these?
Business growth for airlines will come from Tier-II and Tier-III towns and we need to do a lot of things to facilitate the growth from these areas. We also need to do a lot of route rationalisations and allow airlines to fly to these cities and towns but not at the cost of losing money. I am of the view that private participation should be taken to build these airports. We modernised some on a public-private partnership but that got stalled and we need to continue it. The Airports Authority of India does not have the money to build all the airports.
Many Indian carriers have applied to ply abroad and the approvals are pending with the ministry. Would we see the permissions coming?
We are not utilising many of the bilateral rights in international routes. If Air India is not able to utilise it and the rights are unused, we should give it to other Indian carriers.
The airlines are also facing issues like high sales tax on jet fuel and want the government to allow foreign carriers to buy stake in Indian ones.
We have written to the Directorate General of Foreign Trade to allow airlines to import fuel directly. The Committee of Secretaries (formed to suggest ways to revive the aviation industry) has proposed that the airlines’ credit period should be increased by airport operators and oil marketing companies, and that the cap for foreign airlines buying stake in Indian carriers be increased up to 49 per cent. We will discuss all these proposals in a meeting of ministers.
What is your take on the revival of Air India?
It is going to be difficult. It is a national carrier and we have to keep it flying. There are many employees and we have to be very careful during the revival process to avoid any human problem from coming up.
What, according to you, are the problems and requirements of Air India?
AI needs money. They are paying Rs 3,000 crore interest annually. The banks and the Reserve Bank of India are working on restructuring the debt. A lot of financial restructuring is required before AI stabilises. The problems are many. They have to become competitive and follow the industry norms. Also, they have to realise they are in a service industry and the customer is the king. They have to have a grievance redressal system, where the complaints of customers can be resolved. Above all, a viable business plan. All other decisions, on getting planes, formation of Strategic Business Units and equity infusion is to come from the Cabinet. We are working on moving these soon.
An industry body had complained that Air India does not follow the industry norms and blamed it for keeping fares unsustainably low.
Every airline has, at some time, tinkered with fares to increase market share. So did AI. The only problem is that the carrier could not manage its cost and make money out of the increase in passenger numbers.
Are you ready take tough decisions, if need be, in the case of Air India?
I do not think there can be revival without tough decisions. We will take tough decisions but at the same time, need to keep employees’ welfare in mind.
There has been a safety audit by the Directorate General of Civil Aviation (DGCA), which has raised a lot of issues on safety procedures followed by these airlines. Do you think that needs immediate attention?
The safety audit is routine and DGCA does it from time to time. The report has raised some concerns but there are no violations, as such. Also, there is no fear that safety is being compromised by any airline. The audit report is essentially talking about more pilots, proper training, but all these do not lead to safety violation.
These have to be looked into and we need to be careful, but there has been no such violation that should lead to shutting an airline.
If there is any such violation, the DGCA will act according to the set rules and there will be no differentiation between a government and private airline.
The report has also raised safety issues in Air India Express, a low-cost subsidiary of AI.
The airline management is looking into the issue. I’m told there is a shortage of pilots in AI Express. We will see whether the parent company can help its subsidiary by deputing some pilots or not. But there should not be any concern that flying is unsafe in India.
How will the Congress-RLD alliance make a difference in this UP Assembly polls?
People in UP are fed up of Mayawati, her corruption, the breakdown of law and order, lack of governance. In fact every section is disillusioned. So long, there was no clear-cut alternative before the people. With this alliance people want change and are looking at this combination to bring it in. At present the situation is such that whichever party can inspire confidence in people can make it. I am confident that we (Congress-RLD) will form the government.
Are you happy with the way the seat sharing process has happened with the Congress?
See, no two parties are ever happy with the seat sharing arrangement. But as far as our alliance with the Congress-led UPA goes, we have a strong presence in west UP but little presence elsewhere. Congress also needs us. I believe this alliance will work and continue. Although the UP elections is an Assembly elections, its going to impact 2014 general elections.