In this Idea Exchange moderated by National Affairs Editor P Vaidyanathan Iyer, Civil Aviation Minister Pusapati Ashok Gajapathi Raju talks about rescuing Air India and accepting Telangana. Asked about ‘love jihad’ remarks made by BJP leaders, he calls it their ‘personal view’
Civil Aviation Minister Pusapati Ashok Gajapathi Raju, a first-time MP and one of the senior leaders of the Telugu Desam Party, hails from the royal Gajapathi family of Vizianagaram. The 63-year-old seven-time MLA has taken charge of the aviation portfolio at a time when the sector is faced with strong headwinds that include regulatory glitches, airlines staring at mounting losses, poor air connectivity in several pockets and creaking airport infrastructure, especially outside of the metros. The accumulated losses of players in the civil aviation sector are pegged at around Rs 49,000 crore, with Raju and his team facing the daunting challenge of preventing a Kingfisher Airlines-like meltdown. Aggravating the policy muddle are issues such as protectionist policies that make it tough for new airlines to compete, and a high fuel cost/tax regime that translates into a high-cost operating environment.
P Vaidyanathan Iyer: The BJP is no longer with the Shiv Sena in Maharashtra. Do you think the BJP is not really taking its allies together given its majority in the Lok Sabha today?
The country is fortunate that a political party has a majority in the Lok Sabha. Because if policies see-saw, the nation pays a heavy price. I can’t immediately comment on this (the BJP-Sena split) because we are also among the allies. Our impression is that the BJP wants a reasonable partnership.
Roudra Bhattacharya: You have said you don’t want aviation to remain an elite activity, and have talked about setting up low-cost airports and increasing connectivity to small towns. What work has happened in that direction? Airlines, already reeling under losses, have opposed regional connectivity.
There is no such thing as a low-cost airport, but (there can be) a no-frills airport, which requires minimum standards to operate. You can pull out the airconditioning, for example. Probably the frills can get added on at some point of time. I am having difficulty pushing for a no-frills airport because local people believe an airport should reflect culture. State governments and ministers do not mind a no-frills airport anywhere else except at their place. When it comes to their own place, they would like something they can be proud of. So we are facing this problem, and are explaining to them that adding frills pushes up costs. When you divide the costs by the number of passengers, the burden is less.
Sunil Jain: How many airports can one expect to be given out for bidding by the end of the year?
We would still like to promote the idea of no-frills airports. It will probably be accepted where there is no airport as of now.
Sunil Jain: Is there any strategy in place?
We have to connect certain areas which are in need of connection. A few states like Arunachal Pradesh need an airport. Sikkim has a land issue, but the Chief Secretary says it is being sorted. So we are happy at certain developments.
Rishi Raj: In three months, there has been talk of doing away with the 5/20 rule, that is completing five years of operations and having 20 aircraft to be eligible to fly overseas. What is left to be examined in it that it is taking time?
The 5/20 rule is antiquated. Nowhere in the world do you have such a regulation. Regulation for the sake of regulation makes no sense. Regional connectivity is a priority for this government. I had an interaction with airlines a week ago. The new players don’t want 5/ 20, but old players want it because it gives them a comfort level. Also, the older players are worried that the newer airlines are more likely to get assistance from financial institutions as they would have cleaner books. So what should the government do? We would like to have more connectivity in India. We would not like to throw the baby out with the bath water. We would like to keep the baby and throw the bathwater.
Sunil Jain: Are you trying to evolve a policy that says we will allow you to fly abroad if you fly in Tier III towns. Or that we will allow you to fly if you fly to regional areas?
Regional connectivity for us is extremely important, even if some of it is loss-making. In international flying, India has a lot of unused bilaterals. If an Indian player makes use of it and contributes to the GDP of India, not another country, we would be happy with it. If an Indian player gives us regional connectivity and wants to fly abroad and is not five years old, and does not have 20 aircraft, are we going to sit and not utilise our bilaterals? So the idea is we need a right economic mix, which can be reviewed and fine-tuned from time to time. We would like the approach where India gains. I would like to develop a template, which I could share with you, with the airlines, with the airports, get their inputs, before it is finalised. Some people will praise me, some will curse me.
Sunil Jain: Do you think Air India’s share of domestic passengers will increase or decrease in the coming years?
I would put it slightly differently. It is like a patient on a ventilator. If the ventilator is removed, will the patient survive or die? Either way, there are certain implications. We don’t want to land in a situation where someone tells us, ‘You did not think of this angle’. And we have given guidelines to Air India. I don’t think anyone has found fault with us giving guidelines to them. Probably these guidelines can be improved upon. We would like them to come out of the mess they have been pushed into. They took certain decisions that probably no commercial organisation would take.
Anil Sasi: You say the airline was not managed well, so why have you sought an extension for the CMD? Apparently the PM overruled it but you again sought his extension.
I asked for an extension for Rohit Nandan because I didn’t want Air India to go headless. Searching for a new chairman takes time. So the PM’s office has agreed and given him a three-month extension.
Sunil Jain: The previous government tried to professionalise Air India. They brought in a professional CEO and gave him certain powers, but later withdrew them. For the new CEO, are you looking at the same joint secretary kind of person or somebody from outside?
We ultimately want that Air India runs — if it has to — on professional lines. We would also like it to be socially responsible. Like Air India evacuated Indians from Libya and Iraq. In Iraq, there was an incident that never got reported. One of the Air India planes had to hover for a considerable period of time before it was allowed to land. I don’t think a private player is willing to be in the skies for a couple of hours. So that way, we thrust certain social responsibility on Air India. To be fair, that social responsibility is not responsible for its books going into a tailspin… I agree. What we need is a board that will take social directions from the government of the day but also take commercial decisions.
Seema Chishti: For Air India or other such public sector units, is it fair to impose an economic criteria when you are looking at utility? Or are you looking at smarter ways of utility? Does your government have a principled position that privatisation is better than public ownership?
Even in the private sector, airlines like Kingfisher have crashed. I have nothing against public or private sector, both have a role. Air India has a very good reach in our country and getting anything to replace that reach is not easy. So these realities have to be looked into.
Sunil Jain: Are you forcing airlines to fly to certain areas and thus adding to their losses?
We are a big country, with problems of infrastructure and connectivity. We are balancing things, there are cross-subsidies. We have added a department for north-eastern states, for which we will provide viability gap funding, the same offer is there for Andaman and Nicobar. We do lay certain transparent conditions, as nobody is planning a loss. If there is a loss, it is incidental. The policy has to be uniform, it should be a level playing field. Now why did Indigo get its books right and why did some other airline have its books in a mess? These are things we cannot help.
Liz Mathew: Some TRS leaders and other politicians have said the media keeps talking about differences between Seemandhra and Telangana. What is the TDP’s view?
The TDP has a presence in both states — in one, as the opposition, in the other, as the ruling party. As far as behaviour of chief ministers is concerned, it is better answered by them. But certain things are a little funny. In India, a citizen can reside anywhere. We in government of India, we have our feelings, but we shouldn’t voice it. They (the chief ministers) are free to voice what they want within the framework of the Constitution. We should try to see that no state is discriminated against. So this is broadly the way we are going. Politically, the TDP will work for both states.
Sandeep Singh: You have said that the Indian aviation sector is confined to the passenger, with cargo almost not present. So what are you doing there, what’s the potential?
In the cargo sector the world over, goods transported are either perishable or high-value, low-volume — I’m not an expert, but it’s a fairly informed hunch. Maybe a situation develops where the market — with forward integration and backward integration on perishables done — opens an economic activity directly in the field… Probably India needs it the most also. And one advantage with India is that we have airports everywhere. So if these things happen, infrastructure can be utilised to its optimum with the development of a completely new field.
Liz Mathew: Is the TDP embarrassed by the BJP’s ‘love jihad’ campaign or BJP MLA Sakshi Maharaj’s allegation that madrasas are training terrorists?
I don’t know the exact details of the words used, but probably that is their personal opinion. I would not go beyond it without understanding it further. But I feel that no political activity can ever be built on hate.
Pavan Burugula*: As the major regional party in united Andhra Pradesh, do you think that had you taken a strong stand — either pro- or anti-Telangana — you could have reduced the extent of chaos seen in the last three years?
First things first, you are a regional party. You stop being a regional party in one state, and become a regional party in two states. The area is much the same. If any political party has to survive, it can’t go against the aspirations of the people of that area. We don’t want to be wastepaper baskets. We’d like to be there… Do you want to be away from reality and run a political party? I think that would be very difficult.
Rajgopal Singh*: The previous NDA government had taken a very aggressive stand on privatisation of Air India and now your ministry is rejecting that idea. What made you change this stance?
The same question was put to me in Parliament, and I said clearly that no decision has been taken as of now. We are open to suggestions. I am not against privatisation. And against all costs, I’m not against the public sector. Both have a role and they have to play it.
Anil Sasi: There are reports of 150-odd pilots of large carriers having either flunked or not taken the test at all and to be flying around. Are you worried about this, is the DGCA (Directorate General of Civil Aviation) doing anything beyond issuing show-cause notices?
The DGCA is expected to enforce the law of the land and its regulations. Regarding qualifications, there is a licencing procedure that has to be followed. There are procedures which airlines have to follow and the regulatory body has to take action accordingly. I don’t have to tell them to do their job. I’m not the licencing authority. I trust Indian regulators to do their job, like any Indian citizen. I can’t start off with mistrust, I have to start with trust that they will check and regulate. And we expect them to rise to the occasion. If they don’t, we have to start taking action.
Rajgopal Singh*: We talked about the social responsibility of Air India and you mentioned Iraq, Libya and all that. But that happens only once in a while, and your ministry has justified a Rs 30,000-crore bailout package given to Air India. Isn’t that too much of a price to pay to keep our pride afloat, and especially in a country where several can’t afford basic healthcare and education?
I would not link both. Economically, Air India is in a bad shape. And I don’t think the good work done in Libya or Iraq or Srinagar is the cause for floating such a bailout. These two have to be separately looked at. While India is able to respond to certain situations which do us proud, we feel it is a step in the right direction. We would like to retain the good and get rid of the bad. Like I said, we would like to keep the baby and throw the bath water.
Transcribed by Debesh Banerjee & Nikita Puri
* EXIMS students