Aviation Sorties

parking space because there was a shortage at Changi! No one believed all this, not even the members of the United Front government. Indeed, it was generally known that the ministry of external affairs, which was headed at the time Mr Inder Kumar Gujral, was very upset at the decision to lock out foreign airlines in general and SIA in particular. India had been trying to cosy up to Singapore so as to ease its entry into ASEAN and all the results of the good work done until then which included several high level bilateral official visits were jeopardised. That was another reason why, when Mr Gujral became prime minister and took away the information and broadcasting portfolio from the civil aviation minister Mr C M Ibrahim, the decision was seen as the first move to modify the aviation policy.

 

That process seems to be on still and, perhaps in order not to offend Mr Ibrahim (though why not is not clear), a via media is apparently being found. If successful, this could give the foreign airlines read SIA because no other airline is interested just yet a 26 per cent stake in the joint venture. But whether that would be enough to make the airline viable is not certain because a good chunk of the rest of the capital would have to be found by the Tatas. Also, SIA may not be attracted by such a small slice. There could, therefore, be a case for higher equity, say at least 50 per cent. The reason is simple: aviation is a capital intensive business. India is short of capital and what little it has, can be found other even more productive uses. So it makes sense to use foreign capital in aviation to the extent possible. The argument that no one else allows more doesnt hold, because the contexts are quite different. In any case, even those restrictions have begun to slowly melt away, as the new policy in

Europe shows. The key point to appreciate, therefore, is that India cannot swim (fly?) in one direction while the world swims in the other. That would be plain folly.