India’s Minister for Civil Aviation, in an interview with Times Now, broadcast this afternoon, said the Air India sale was only delayed by two months. Invitation for EOI had been postponed to end-June, in view of the Coronovirus concerns. Not selling the middle seat on board aircraft was not any solution, he said, as it did not create the required social distance of one metre. Read on…
Plans for sell-off of Air India, have only been delayed, and not derailed, said India’s civil aviation minister in an interview to Times Now. How can they be derailed, he asked, highlighting that it is an airline that runs planes in the sky, then how come the question of it being derailed? He replied half sarcastically, when the anchor asked if the plans were off, in the wake of the COVID emergency. Air India was losing money well before this immediate crisis. When the flights begin, he said the airline would need an infusion of some 500-600 crores every month to keep it flying.
Minister Puri said that Air India was a prime national asset, with its engineering, aircrafts, assets and traffic rights. It needed hand holding at a time like this and cannot be allowed to wither away.
In the past, it has been said the time was not ripe, and government should wait for times when the environment was more investor friendly. Right now, you do not need crystal gazing to say when the time will be ripe. Not in the next two years, perhaps. If that logic is acceptable, government will need an infusion of another Rs. 12,000 crores over the next two years, if now more.
In our opinion, that is a lot of taxpayers’ money, to say the least. Till when will and should the government keep this infusion going, is a moot question, that only the government can say. If not even a sale, it could get the Satyam kind of new management, and given a fresh lease of life. Also, there are many of us who believe its management and ownership must remain in Indian hands. Indian travel and tourism need an airline that can be called its own!
But coming back to the Minister’s interview, he said that flights may resume sooner than later. He was confident that SOPs were in place among all concerned stakeholders. He ruled out the reservations expressed on the selling of the middle seat on board airlines. Keeping it vacant did not create the required social distancing norm, he said, and therefore did not need to be there. Regarding prices, he said that prices were already low, and unsustainable. He pointed out that competition between LCCs had made the business hit rock bottom. He cited the example of a ticket cost of 5,000/00 between Delhi and Mumbai more than twenty years ago. Today, before the lock down it was selling for even less!
Asked if there would be a bailout for the sector, he did not want to occupy his senior minister’s position in the Finance Ministry, which was looking into these issues. The nation, he said, had been confronted with bailout requests from across sectors, and it was difficult for government to single out one or the other. There were other issues too confronting the sector, like the high cost of taxes on ATF and hoped these could be addressed.
Asked to comment on the dilemma that where the city pairs of promise existed, these were also the hotspots of the COVID virus, the RED Zones, the minister said this was true but between now (6th May was when the interview took place), and date of resumption, he hoped some clarity within the red zones would have emerged to allow for metro cities to get connected. He also said these zoning of areas was a dynamic activity, where ground realities changed very quickly. Today, an area under green could change overnight, and the reverse was equally true.
The impression we could get was that the opening was imminent, only the right time was to be arrived. With every caution in the book being taken, by all concerned stakeholders, we should get the economy going with the opening of air travel. Minister Puri mentioned that with our country aspiring to become 5 trillion economy, air transport was an important element in the growth story, a refreshing thought that air travel was a necessity and not a luxury, as had been suggested often in the corridors of many previous governments. Opening of the Indian aviation sector would help lift Indian economy and get the wheels in motion, again.