It is unclear whether the Survey has interpreted Prime Minister Atal Behari Vajpayee's announcement in October of constructing new international airports at five cities as merely up-grading of five airports to world-class standards.

Civil aviation minister Ananth Kumar had declared at a press conference in January that the construction of new airports and the up-gradation of existing airports to world-class stature with private assistance were two separate plans.

He had stated that the task force is in the process of identifying the five locations where newinternational airports will be constructed subsequent to the PM's announcement.

Further, Kumar announced that the Cabinet has cleared the privatisation of the existing airport at Bangalore, besides airports located at the four metro cities of Delhi, Mumbai, Calcutta and Chennai.

In contrast to the minister's announcement, the Survey discusses the privatisation of the "proposed new airport at Bangalore". Incidentally, there is no plan at present to construct a new airport at Bangalore either by the Airports Authority of India (AAI) or by private players after the Tata-Raytheon proposal was withdrawn by the Tatas amidst high drama. Besides, the Survey is quiet about the Government's plan to corporatise the airports at Calcutta and Chennai.

The Economic Survey underlines the precarious financial health of the two state-run carriers, Indian Airlines (IA) and Air India (AI).

IA incurred a net loss of Rs 34.7 crore between April-October 1998. The airline had recorded a profit of Rs 47.3 crore during1997-98, and expects a net profit of around Rs 50 crore this year as well.

Air India incurred a net loss of Rs 129 crore during April-September 1998. The losses are ascribed to factors like reduction in yield due to increased competition and increase in operational costs; the incidence of depreciation and interest on new aircraft, the increase in wage bill and other staff costs; and the depreciation of the rupee.

AI's profits in 1997-98 were lower at Rs 181 crore as compared to Rs 296 crore in 1996-97.

The Airports Authority of India (AAI) earned a net profit of Rs 196 crore in 1997-98 as compared to Rs 132 crore in 1996-97. The higher profit is attributed to increase in airport charges and passenger service fee.The Survey points out that despite the entry of private players in domestic aviation, Indian Airlines has retained its position as the major played in this sector. The two private airlines, Jet Airways and Sahara Airlines, and 31 air taxi operators cater to 37 per cent of total domestic traffic.The number of passengers availing of private air services has increased from 15,000 in 1990 to 42.6 lakh in 1997.