My Priority Is To Strengthen IA & A-I

Updated: May 31 2004, 05:30am hrs
From the founder of the Rs 4 billion Ceejay Group involved in bidis, tobacco processing, healthcare, edible oils, packaging, finance and real estate to the Union civil aviation ministry, Praful Patel has come a long way. A close confidant of the Maratha strongman, Sharad Pawar, Mr Patel began his political career way back in 1985 when he became the president of the Gondia municipal council in Maharashtra. He was first elected to the Lok Sabha in 1991 and represented the naxalite-infested Bhandara. He was re-elected in 1996 and 1998, and became Rajya Sabha member in 2000.

In his new avatar as the minister of state for civil aviation with independent charge, Mr Patel has already announced that he would make all-out efforts to strengthen Indian Airlines and Air-India to take on the mounting competition in the civil aviation sector. Speaking to Sanjay Jog of FE, he said that his main focus would be on expanding the civil aviation sector in India and that this would dominate the agenda in the ensuing civil aviation policy. Excerpts from his interview.

What is the governments stand on the civil aviation policy
We plan to bring efficiency, transparency and delivery to the ministry. The proposed comprehensive civil aviation policy will be a long-term vision document for the sector. It will cover all the areas, including domestic and international airlines, their growth and, above all, reforms. We are quite sure that the policy will be released in the next three months.

What is being planned on the Naresh Chandra Committee recommendations to make air travel more affordable
The civil aviation policy will include various recommendations made by the Naresh Chandra Committee on making air travel affordable. I cannot comment on how it can be done as I have yet to go the recommendations fully. But our aim would definitely be to encourage an healthy competition. Various schemes, including the apex fare scheme introduced by Indian Airlines (IA), has clicked. There are also other private airlines which are operating on lower air fares. The theme of the proposed civil aviation policy is expand the civil aviation sector in India wherein the public and private airlines have important roles to play and they will have an opportunity to grow.

The theme of the proposed civil aviation policy is to expand the civil aviation sector in India wherein the public and private airlines have important roles to play
Without privatisation, how will IA and Air-India (A-I) compete with the private operators
Let me make it amly clear that my priority is to strengthen and not privatise IA and A-I. Thereafter, these airlines will be in a position to take on the burgeoning competition. Even if my ministry has to give up its stakes in these airlines, there should be better value for it. I am aware that both have been plagued with old aircraft, limited capacities, small equity base and, above all, heavy burden of air turbine fuel (ATF) which they have to bear.

In the case of IA, there has been no additions to its fleet since 1989. So, how can they compete with the other (private) airlines This is also applicable to A-I. Neither were allowed to grow in the past. We will attempt to strengthen both airlines and also simultaneously allow the private airlines to operate.

During my meeting with the finance minister I drove home the point that a one-time equity infusion in IA and A-I to enhance the capital base of these government carriers and their long-awaited fleet acquisition were required. He assured me that they were top-most on his mind.

Do you envisage an increase in ATF prices in the wake of the hike in international crude prices
In view of the escalating ATF prices, I have apprised the finance minister. I am fully optimistic that the finance ministry will take the issue into consideration.

What is the governments plan on fleet acquisition
On Friday, I had a preliminary meeting with Mr Chidambaram on financing the fleet acquisition plans of IA and A-I. But you will have to wait for some time before any announcements are made.

The NDA had an open sky policy. What is the UPAs take on that How will IA compete with Jet and other airlines
Despite constraints, IA has improved its performance. I am sure that with the fleet addition, more capacity will be added.

Is the government going to encourage budget airlines If so, how would IA and A-I compete Will they be allowed to operate budget airlines
In India, with a population of 105 crore people, there are only 110 planes. There is every scope for all airlines public or private or budget airlines to grow and tap the untapped potential. In the last few years, air traffic is growing at an average 10-12% annually. I expect almost similar or more growth rate for future.

Will there be private sector participation in airports What plans, if any, are on the anvil for modernising them
I do not want to say anything at this point. You will find out at length once the civil aviation policy comes out.

What about modernising Delhi and Mumbai airports as well as the new airports at Hyderabad and Bangalore
The modernisation and/or restructuring of Mumbai and Delhi airports will be completed by the end of December 2004. My ministry has already appointed consultants for this purpose. Global bids for partners in this project will be floated soon.

Each and every airport, including Hyderabad and Bangalore, will be modernised and/or restructured. All these airports will have world class structures at par with international airports. No new airport will be developed without adhering to these norms.

Are there any plans for a major tie-up between IA and/or A-I with foreign airlines in the tourism sector
We will certainly talk to the tourism ministry. However, I have yet to give a thought on any possible tie-ups between IA, A-I and international carriers for tapping the potential in the tourism sector.