Ajit not against AirAsia getting national permit

But officials differ, say firm should first fly regional

Differences seem to have emerged within the civil aviation ministry on how to deal with the proposed AirAsia-Tata joint venture (JV).

On the one hand, minister Ajit Singh says his ministry is open to giving the proposed airline firm a national air operator's permit to fly across the country; on the other, senior ministry officials say they would prefer the company be given a regional permit before being allowed to fly national later.

Singh told Business Standard: "The AirAsia-Tata alliance has not yet applied, but we have no problem in giving it all-India permit. As for demand-supply mismatch on trunk routes and growth in traffic, why should we worry? The airlines should be worried. The market forces will take care of that. Competition always benefits consumers."

A senior ministry official, however, said: "We have concerns over the firm being issued a national permit in the beginning. The ministry is about to bring new route dispersal guidelines for regional connectivity. If all start deploying planes on metro routes, there would be a demand-capacity mismatch."

The bureaucracy, of course, has the option of taking up the divergence in its views with the minister's with the cabinet secretary.

A regional permit allows an airline to operate in specified designated zones of the country. The holder of a regional permit can fly out of four regions - north, south, west and east, including northeast - and operate flights from a metro city in the chosen region to smaller cities within and outside the chosen region. A regional airline is not allowed to fly to a metro city outside its own region.

AirAsia promoter Tony Fernandes had said in a public statement his airline JV would start operations with three-four A-320 aircraft, initially concentrating on Tier-II and -III cities, instead of flying to Delhi and Mumbai, where airport charges were too high.

Another senior ministry official raised some questions: "AirAsia plans to start with a three-four plane fleet. However, according to rules, a fleet of at least five aircraft is required. Besides, is it viable to fly 180-seater A-320s in Tier-III cities? Had they discussed these things with the civil aviation ministry, Fernandes would have had more clarity."

The government had earlier raised questions on G R Gopinath's application for upgrade of his airline's permit from regional to national, saying he should first perform well on the regional routes and then seek an upgrade.