Terming UPA’s aviation policy as “opaque”, government on Monday brought in a fresh draft recommending listing of state-run Airports Authority of India and chopper firm Pawan Hans on stock exchanges and steps to beef up Air India operations, hinting at its stake sale too.

Civil Aviation Minister Ashok Gajapathi Raju unveiled the draft civil aviation policy which also proposes to enhance regional air connectivity, develop six major metro airports as international hubs, create more airports through PPP mode, rationalise jet fuel cost, promote air cargo, MRO and helicopter operations and improve passenger facilitation.

The rule, which allows an Indian airline to fly abroad only after they have flown domestic for five years and have a 20-aircraft fleet, would also be reviewed, he said.

The draft would now be open for wider consultation with all stakeholders, with the Minister saying he hoped to finalise and implement it by January next year.

“If a policy existed (during 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 in response to questions.

On the proposal to list mini ratna AAI and Pawan Hans Helicopters Limited (PHHL) on stock exchanges to “improve transparency and efficiency”, he said, “AAI will be corporatised, followed by listing in the stock exchanges in order to improve efficiency and transparency. Listing of PHHL would also be undertaken with the same objective.”

“PHHL’s listing straightaway might make sense. For AAI also, that is possible,” the Minister said.

A senior official later said no time frame has yet been fixed for by when the two entities would be listed or what percentage of government holding would be divested in them.

Regarding privatisation of Air India, he said this was a suggestion made by “certain sections. While some say privatisation is a solution, others say it should remain with the public sector. Another section says the airline should be managed professionally by professional bodies.”
“Why should we close our options? Let us take a conscious decision,” he said. Asked whether Air India could also be listed in the stock market like AAI and PHHL, the Minister said, “If it could get listed, I would be the happiest person”.

Observing that an “in-house” Experts Committee would be set up soon to develop “a future roadmap” for Air India, he said, “It is in the country’s interest that it cruises smoothly. All these suggestions have emerged. We don’t want to open a pandora’s box. We will have to take a conscious decision as it is a delicate matter.”

Later, the Civil Aviation Ministry official, who did not wish to be named, said any decision on stake sale or professional management would be taken only after the experts group gives its recommendations and then “we will see what is the best alternative or the best way forward.”
On AAI and PHHL, he said it would be easier to list PHHL because it is already a registered company.

“It could take up to six months for listing PHHL. We will work with the Department of Disinvestment, as it is the nodal Ministry for divesting stake in PSUs. Mopping up funds is not the prime objective of the exercise in both the entities. It will also help bring about greater professionalism in the boards of the two entities,” the official said.

To questions on whether the rule of five years of domestic flying and 20-plane fleet to allow Indian carriers to fly abroad would be scrapped, the Minister indicated doing away with it, saying rules which check the growth of aviation would go. “To my mind, it doesn’t make sense … We may throw the bathwater and keep the baby”.

On high taxes on jet fuel, Raju said the Centre has been requesting states to lower the taxes as fuel costs are close to 40-45 per cent of an airline’s total operational cost.

“When global petroleum prices are coming down, we will try to get a strategy in place to pass on that benefit,” he said.