For civil aviation minister Ashok Gajapathi Raju Pusapati, removing the elitist tag from air travel is the main agenda. That?s why the minister, who hails from the Telugu Desam Party, would like to focus on creating ?no-frills airports?, removing all kinds of barriers for entry of more new players, and a new policy governing bilaterals. In an interview with FE?s Roudra Bhattacharya, Raju tells that privatising Air India at this stage would not be possible as there would be no takers for it. Excerpts: ?
What exactly is the idea behind the plan to build 200 low-cost airports in tier 2 and 3 cities?
This is part of our 100-day agenda. A policy on this would be announced by August. I would prefer calling them ?no-frills? airports, because there is nothing really low about the cost, runways cost the same whether you have a terminal building or not. We have more than 400 airstrips across the country, of which 90 are operational airports and about 65 have regular flights. So we require both long and short-term plans. In long-term, everybody wants something nice ? that is ultimately where we want to be, but it cannot be achieved overnight. If you look at the existing infrastructure, Delhi is a premier city and it has a nice airport with world-class facilities. In Mumbai, again the facilities are improving and the airport is doing well, but there is only one runway practically with 47 movements an hour and the world’s best is about 60. So the gap for growth is little. Unless some other strategies are brought in by the time this gap is plugged, we will be choking a premier city of our country. India cannot afford to do that.
What are the low-hanging fruits you can target immediately?
The Star Alliance-Air India partnership has come through, even though work had started earlier. The FAA downgrade, we have to get back, because if we allow it to go like this, our aviation industry will get into more trouble. We will soon seek a review, we want to finish it fast as it is important for our image.
If we are able to have a little professional approach, we can land on a springboard. MRO facilities are also needed. Some presentations have been made and there are actionable points for both the central and state governments. It can definitely bring job opportunities and savings of foreign exchange. Airlines are going to Sri Lanka and Dubai for such services. We can still catch the bus, but we have delayed things. ?
Bringing down the cost of jet fuel would really help airlines. How do you plan to go about it?
We have to look at it because we cannot have high costs imposed on airlines. There was a time when it was considered elitist so it didn’t matter, but those days are gone. If we get the states to bring down their ATF to reasonable levels like 4% or less, that would be good. It won?t be revenue loss because they don?t have the revenue anyway. If the states bring it down and get more business, other states will also start thinking. The finance minister will hold a meet on this, but what we were thinking is that if we can have an interaction on aviation and tourism, such things can be worked out.
The ministry is working on a new policy for bilaterals. What do we expect?
A lot of time we are unable to use the seats on offer and foreign airlines capture our market. This is our experience. Deals that have been concluded are done, it would be difficult to review them with other countries. But that can be reviewed by India. Suppose I have certain number of seats with some country and it is not utilised, but if the seats were available to other airlines, they may use them. What is a reasonable time for an airline to use the seats? This may have legal implications as well, so we are looking at it. Agreements have been made, but are they private property? If not, there should be reasonable time ? 2 or 5 years ? to perform. Probably a way to discouraging this is that if you do not utilise it for some time, you will have to pay so much, or surrender.
Domestic airlines have been opposing the entry of new players. Will you review clearances given to Tata-SIA and AirAsia?
Any type of competition is healthy, and any competition resulting in people getting better facilities must be encouraged. I think it is an Indian culture to block new entrants, especially from those who have arrived and want to stay there forever. We would like Air India to also compete, but it has to have a level playing field. India’s connectivity, social obligations like picking citizens from Iraq, all these have a cost. We have to be clear on what we want Air India to do.
Certain things are in the courts (AirAsia, Tata-SIA permits), while there are other objections as well. If policy formulation was done in a more transparent manner, this situation would not have happened. You have to learn from you mistake and then come out of it.
Is Air India?s privatisation on the cards?
Right now we are reviewing the profitability of Air India?s routes and a clear picture will emerge soon. As of now, the books are bad, and it is unsustainable like this. I have been asked so many times if we would sell Air India, but the truth is that nobody would want to buy the airline given the current state. Privatisation would not be easy as it is not a hot cake in the market. There are no time frame on this, but the question cannot be left open forever.