A few days ago, Mr. Rahul Bhatia, co-promoter of Indian low cost carrier IndiGo, stated in public, grievances, that many in the Indian airline industry believe in private. That the government is not behaving in a fair manner and keeping alive national carrier Air India on life support with massive bailouts of public money, preferential treatment in route allocation, etc. Mr. Bhatia also inferred a nexus to keep IndiGo’s competitor, Dr. Vijay Mallya promoted Kingfisher Airlines, alive.
Today the government released a statement refuting these charges.
The Government strongly refutes the allegations made by Shri Rahul Bhatia, Promoter, Indigo Airlines, as reported in a section of media recently, that it is tinkering with the aviation policies for a select few.
The Ministry of Civil Aviation is performing its functions in an objective, fair and transparent manner without discrimination against any airlines. It is the policy of the Government to promote civil aviation sector in the country by making the airlines financially viable and the air travel affordable for the people.
It is clarified that the Government being owner of the Air India is well within its rights to promote the national carrier and prepare it for competition. Air India was highly under-capitalized at the time of merger in 2007 and has therefore been provided support in the form of equity to correct the skewed debt equity ratio. In fact Government has not subsidized Air India. Moreover, the Government has stipulated stringent performance related milestones for Air India and has also established an oversight committee to ensure that these milestones are achieved.
The Ministry of Civil Aviation also clarifies that the private operators are not being provided any financial support directly or indirectly but have been allowed to perform as per market forces. On the issue of safety of airlines, it is stated that the Directorate General of Civil Aviation (DGCA) has been regularly monitoring the safety related issues of all airlines. The DG has also decided to quarterly monitor the safety records of airlines as per the industry norms. Further, there are no regulatory frameworks anywhere in the world allowing cancellation of the license of airlines merely for failing to pay salaries to the staff. The comments of Shri Bhatia in this regard are uncalled for and baseless.
Regarding, allegations of favourtism in traffic route allocations, it is clarified that all requests in this regard have been dealt with objectively in a fair manner so that every applicant airlines gets its share as per its demand without prejudice. Indigo has been allocated traffic rights based on their requests for international routes. During this Summer-2012 alone they have been given 63 services per week which include 28 services to Dubai only. In addition, Indigo has also been given bilateral rights to fly to Singapore, Bangkok, Jeddah and Kathmandu. This is significant in the background of the fact that earlier their total services to international routes were only 53 per week.
One has to now ponder if there will be any backlash against IndiGo within the ministry. Government, especially Indian, does not like to be questioned in public, and the civil aviation ministry enjoys considerable clout in an airline’s operations with domain over route allocations, day-to-day operations, certifications, policies, etc.
It is rumoured that IndiGo has substantial investment by political heavyweights, including linkages to the real first political family of India, and even possibly senior ministers within the Union cabinet. Is Mr. Bhatia feeling secure in a cocoon of political protection causing his much needed public questioning of the government?
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