Ajit Singh, Minister of Civil Aviation spoke to Surajeet Dasgupta & Disha Kanwar of Business Standard on a range of issues confronting the aviation sector. Excerpts as below:

Many airlines have said there should be incentives for efficient ones, so that they can do better.
Are you saying that in a free enterprise system, the government should decide who is doing better and make it better and kill the weak one? We cannot. An airline doing well today might well be the loser next year and another one may come up. Some companies will fail and some will prosper. Our job is to provide equal plane ground.

Fares have gone up by 30 per cent in the first quarter of this year. Are you going to intervene?
The government has no intention of regulating fares. The problem in this is that there are several unanswered questions. We don’t even know the variable and fixed components, why different operators are charging differently.We have also set up a committee and they have given their report.We should collect data on prices and make it public. That should put pressure on airlines. 

Despite permitting import of ATF (aviation turbine fuel), no airline has been practically able to import it directly. What are you doing on this?
We have written to the petroleum minister to make ATF a notified commodity. The price of ATF is decided by oil companies in India, which is not transparent .ATF is not a notified product, so they don’t have to tell you how they arrived at this price. Once it is notified, PNGRB (Petroleum and Natural Gas Regulatory Board) would be able to regulate it. Then we will have the data. I will give you one example. Delhi airport charges 20 per cent ATF tax and Mumbai has 25 per cent. The fuel offtake in Delhi is almost twice as much as in Mumbai, despite the number of flights being the same. If the sales tax is reduced, that is also a great boost to the area.

What is the progress on allowing foreign airlines to invest in Indian skies?
FDI (foreign direct investment) will come only if we get consensus among all the allies (in the ruling coalition) and if we allow them. We are definitely in financial stress. But FDI would be coming for other reasons — the growth we have, the potential we have, a growing middle class, traffic rights and the strategic geographical position. It is basically an enabling legislation and it is up to the airlines.

How are you working for the turnaround of Air India in the wake of the pilots strike and the financial problems it is mired in. How will you cut costs?
On many routes, we don’t even meet the operations cost. Of 300 routes, only three make money. AI does not even have the correct data. They are not following simple common-sensical things. Up to two months earlier, their pilot assignment was being done by a few senior pilots; we have now computerised it. Last year, we paid Rs 141 crore for hotel bills and Rs 11 crore for taxi bills. We are redefining ‘family’ for (free) tickets; it now includes daughters, sons, in-laws. Even after retirement, you enjoy the benefits. We have also decided that the salary structure will be redone - we will put half of the productivity linked incentive part into salaries and the rest will be paid only after the airlines make profits.

You are also looking at monetising real estate and all that. How much work has been done?
AI has no idea where all its property is. We have an office in Milan and we have not flown there for 20 years. All over the world, we have paintings and land like that. A committee has been set up and in two months, we will have a complete list and evaluation. We have Rs 350 crore worth of paintings Nobody has done the valuation of real estate but estimates vary from Rs 5,000 to Rs 10,000 crore.

Do you think a VRS (Voluntary Retirement Scheme) for Air India would work?
It is going to be difficult but we are trying our best. A ground handling staffer gets Rs 50,000 a month, so why and where will he go?

Are you looking at giving more powers to DGCA (the sector regulator)?
We understand that DGCA needs some independence in hiring and in their authority to check the safety aspect. We are bringing in a Civil Aviation Authority Bill for that.

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