AAI, PHHL to be listed; new draft of civil aviation policy released

“If a policy existed (during the UPA rule), it was opaque. We want to develop a transparent policy because opaqueness leads itself to allegations. This government wants to work in a transparent manner,” Raju said.

The draft policy, which is now available in the public domain for greater participation from the stakeholders, proposes enhancing regional air connectivity, develop six major metro airports as international travel and transit hubs, create more airports through PPP mode, rationalise jet fuel cost, promote air cargo, Maintenance Repair and Overhaul (MRO) services and helicopter operations apart from stressing on improving passenger facilitation services.

The Minister said he was hopeful that the draft policy would be finalised by January next year. “It is essential to ensure that Air India, our national carrier, achieves its full potential. An expert committee will be constituted to develop a future roadmap for Air India. AAI will be corporatised, followed by listings in the stock exchanges, in order to improve efficiency and transparency. PHHL will be listed in the stock exchanges with the same objective,” says the new draft policy.

A senior ministry official said no time frame has yet been fixed for by when the two entities will be listed or what percentage of the Government holding in the companies will be shed.

“It will be easier to list PHHL first – within the next six months – as it is already a registered company. We will work with the Department of Disinvestment, the nodal Ministry for divesting stake in PSUs. Mopping up funds is not the prime objective of the exercise in case of both the entities. It will also help bring about greater professionalism in the boards of these two entities,” the official said.

Raju, however, hinted at an eventual divestment of Air India, saying there were several suggestions made by different sections, including those in favour and those against privatisation of the national carrier.

“Some say that privatisation is a solution while others feel it should remain a public entity. Another section says the airline should be managed professionally by professional bodies. All these suggestions have emerged. It is in the country’s interest that it cruises smoothly. We don’t want to open a pandora’s box. We will have to take a conscious decision as it is a delicate matter.”

He said there were several issues as mentioned in the draft policy for which the Cabinet’s approval would be required, including a decision on the five year and 20 aircraft rule (5/20) for allowing domestic airlines to start international operations. Raju indicated doing away with the 5/20 rule, saying rules that check the growth of aviation would go. “To my mind, it doesn’t make sense … we may throw the bathwater and keep the baby.”

The draft policy also includes suggestions on tax incentives to encourage the growth of aircraft engineering or Maintenance, Repair and Overhaul (MRO) facilities in India, while chopper operations would be developed not only for transportation, but also in the fields of medical emergencies, relief operations, law and order and oil exploration.

Under the new policy, air navigation services as provided by AAI would be modernised and strengthened to reduce flying time, eliminate crowding at airports and direct routing of planes from one destination to another, and more air freight stations would be added on the lines of container depots in various cities for faster movement of goods.