Govt "backs" Tata Airlines proposal

The report has been referred to the Standing Parliamentary Committee on Aviation by Union Minister for Civil Aviation, Ananth Kumar on October 5. The report was submitted to Kumar in April this year. The five-member committee was headed by joint-secretary P K Brahma.

According to the report its recommendations provide a perspective on long term development of the aviationindustry.

The report recommends that the aircraft acquisition committee needs to be “legitimised”. In order to avoid procedural delays the committee should be made an “empowered” committee. After it has made its recommendations, Director General Civil Aviation (DGCA) should be able to issue necessary permits/orders within a week.

Given the Ministry’s determination to stymie the Tata airline another recommendation under the section headed “entry of private airlines” makes interesting reading. The committee has recommended that the company should own at least 50 per cent of the fleet as proof of their stake and seriouness in the business. The Tata proposal fulfills this criteria.

Under the “development” section the committee has recommended the creation of a statutory regulatory and enabling policy framework with an independent authority to monitor and shape the post-liberalisation development of an air transport system.

Criticizing the current system of seizure of aircraft by the Customs andAirport Authority of India the committee has said that this should be abolished without court orders. It states that these authorities should resort to other means for recovery of dues and should not take “this extreme step which is crippling”.

Putting the blame on sickness of private airlines squarely on an unrealistic system of route dispersal guidelines issued by the Ministry the committee has recommended its scrapping. The report says that while it served its purpose at the initial stage, it lead to duplication of services, overcapacity and uneconomic operations. “This is also a national waste in terms of fuel consumption and underutlization of capacities” says the report.

The committee has recommended that commercial routes should be valued on a scientific basis and be auctioned. The committee has also recommended that income tax on leasing charges for private carriers should be abolished, airport charges should be rationalised to provide relief to small operators and Aviation Turbine Fuel (ATF)prices made uniform across the country.

Interestingly the committee held hearings with chief executives of private airlines who were asked to provide answers to a questionnaire. Modiluft, Damania, NEPC, and East West were asked to submit written evidence and their suggestions to the committee.

The report states that the committee found their stand “rather surprising” as they blamed the Government for their failure to sustain operations. The report states “most of the private airlines were attracted to the industry by the glamour of the airline business. In some cases the board of directors mainly consisted of members of the family-husbands, wives, sons and daughters…”