Ministry refutes allegations of irregularities in slot

BJP had alleged that 'irregularities' caused a loss of Rs 500 crore to national exchequer

The  civil aviation ministry on Monday refuted allegations of the Bharatiya Janata Party (BJP) that senior government officials had colluded in the sale of Jet Airways’ slots at London’s Heathrow Airport to Abu-Dhabi-based Etihad Airways and caused a loss of Rs 500 crore to the national exchequer.  

Terming charges of irregularities in the sale of three slots “absolutely baseless and false”, the ministry stated: “The government or any other civil aviation institution in India has no role to play. This is purely a function of Airport Coordination Ltd of Heathrow Airport and the concerned airlines.”

The said trading of slots at Heathrow or any airport and allotment of global traffic rights to Indian carriers were two different things.  While the rights to fly on international routes under the Bilateral Air Service Agreement are given by the government, the availability of slots are determined by airports.  A slot (or landing and departure time) is  a permissions to use a runway or airport infrastructure. It is given by the airport to the airlines.  Unlike in India where slot trading is not permitted after allocation, at  Heathrow, airlines acquire ‘grandfather rights’ to trade the slot to another airline by way of sale, lease, sale-and-leaseback or 'baby sitting' after two years of allocation, the ministry added. Baby sitting is the practice of leasing slots on a short or medium-term basis by an airline to a non-competing airline.

Baby sitting is the practice of leasing slots on a short or medium-term basis by one airline to a non-competing airline. Sometimes an alliance partner may 'baby sit' a slot to keep out newcomers.

As demand exceeds supply at Heathrow, slot trading is now the principal means of entry at the airport. According to data made available by authorities at Heathrow, the number of slots traded at the airport increased to 526 last year, compared with 42 in 2000. Apart from Air India and Jet, many airlines like SWISS, British Airways, Virgin, Qantas, Delta, Continental and Air France have traded or transferred slots in the last 15 years

 
In the statement, the ministry said Jet’s transfer of three pairs of Heathrow slots to Etihad for $70 million (Rs 420 crore) required "no permission from the government of India/ministry of civil aviation". It added Jet "has obtained permission from the Reserve Bank of India under FEMA (Foreign Exchange Management Act) because foreign exchange was involved in the said trading".

BJP parliamentarian Nishikant Dubey, in a letter to the Chief Vigilance Commissioner (CVC) and the revenue secretary, had alleged Jet had sold three slots at Heathrow to a foreign carrier for a consideration without permission of the government of India. The sale of slots, which rightfully belonged to the government, he claimed, had caused a loss of Rs 500 to the exchequer.

Dubey had alleged the slots should have been transferred to Air India, which has been trying to grow operations to London. The ministry said state-run Air India, which had four slots at Heathrow, was currently using only three. The remaining slot has been leased to Delta Airlines of the US.

The ministry statement comes in the wake of letters written by some politicians to the Prime Minister as well as the Chief Vigilance Commissioner, raising concerns over the Rs 2,058 crore Jet-Etihad deal. Most of these letters also mentioned the slot issue, among other things. The PMO has sought response from the ministry of civil aviation on the questions raised in the letters.