Mumbai: Civil Aviation Minister Vayalar Ravi on Monday said it is considering the recommendation of the Department of Industrial Policy & Promotion (DIPP) to allow foreign carriers to pick up stake in domestic airlines.
"Yes. It is true that we have not rejected DIPP's recommendation (on allowing foreign airlines to invest in domestic carriers). It is under our consideration," Ravi told reporters on the sidelines of the fourth International Civil Aviation Negotiation Conference 2011 (ICAN 2011) here.
However, the minister added that his ministry has not finalised its view on the DIPP proposal.
On the ailing national carrier, which is sitting on a debt pile of close to Rs 64,000 crore including accumulated losses, Ravi said that his first priority is to increase the cash flow of Air India which is struggling with interest payments and high aviation turbine fuel cost.
He also said his ministry is trying to get the sales tax on ATF reduced by all the states.
"Only Kerala and Andhra did not raise sales tax on ATF when prices went up. All other states increased sales tax on ATF and we are talking to these states."
Another focus area is cutting down the expenses of the airline, the minister said.
"Air India needs to make money. We can make money by setting up an MRO (maintenance, repair and overhaul) outfit. But there are differences of opinions. If an MRO is set up, Air India employees must be sent to the new outfit, but not everyone is keen on being sent there.
"I have to strike a compromise with various interests," the minister said.
Ravi was, however, reluctant to discuss plans for equity infusion into the flag carrier, but indicated that during the last week of this month, there will be a meeting of the empowered group of ministers on this.
"Recently, there was a secretary's committee meeting and their report will also be discussed at the meeting. I do see an improvement in Air India's performance," Ravi said.
The minister claimed that in actual terms, there is a scarcity of aircraft. Air India does not have too many long-range aircraft.
On the controversial decision to purchase 27 Dreamliners from Boeing, Ravi said, "I have told the Air India chairman to come to me about how to utilise the aircraft. They have not taken a final decision on purchasing the Boeing 787s because once again, money will have to be borrowed from banks.
"Our main problem of debt is the interest payment. I don't want any further on my head. But AI's recommendation is yet to come," he said.
On the role of the proposed Civil Aviation Accident Investigation Body, he said it will be separated from the regulatory body since sometimes the role of the regulator itself is questioned.
Since an International Civil Aviation Organisation (ICAO) study recommends strengthening the Bureau of Civil Aviation Security, an "aviation security force" would be set up, he said, adding that besides this, an ombudsman would be set up to protect air passengers' rights.
On whether the country would demand "fifth freedom rights" from foreign carriers, Aviation Secretary Nasim Zaidi said, "we will keep the domestic aviation interest in mind".
He dispelled concerns of certain private airlines which feel that bilateral negotiations may largely end up benefiting Air India at their cost.
"When it comes to negotiation of bilateral flying rights, Air India itself may not be able to utilise the entire quota. Private carriers too are Indian carriers.
"I had a meeting with the private carriers on Saturday and they shared their concerns with me. You must also remember that we have been accused of giving away rights to fly overseas to private carriers," Zaidi said.
When asked about why erring officials responsible for recruitment scams were not suspended, he said there was a serious lack of trained manpower in the DGCA.
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