'Government Has Decided To Modernise 25 Non-Metro Airports'

The civil aviation sector in India is poised for a significant take-off. State-owned Indian Airlines is all set to renew its fleet, with the government approving the acquisition of 43 aircraft last week. Also, the Centre is keen to privatise and modernise Mumbai and Delhi airports, despite stout opposition from the Left. And a draft civil policy is being mulled over by the government. Express Travel & Tourism caught up with Union minister for civil aviation Praful Patel. Excerpts:

How does the government's draft civil aviation policy (CAP) plan to increase the efficiency of state-owned airlines?

The draft policy is under inter-ministerial consultation and shall be finalised shortly. The draft looks at strengthening air-transport operators in the public sector by infusing additional equity which, besides budgetary support, may also include raising money in the capital market through an initial public offer (IPO) etc. The government will also encourage the organisational, managerial and financial restructuring of these organisations so that they operate more effectively.

A feature, which impacts the commercial viability of public sector carriers, especially Indian Airlines, relates to the operations on loss-making routes. IA has to shoulder the responsibility of discharging the government's socio-economic objectives by deploying capacities in excess of the prescribed minimum. The government is planning to establish an Essential Air Services Fund (EASF) to support the operations on uneconomical but essential routes by following a system of minimum subsidy bidding.

What is the government policy on low-cost carriers?

No special policy has been adopted for low-cost carriers. The entry of low-cost airlines has increased competition and impacted the market share of all full service airlines, including IA.

However, full service airlines have now introduced competitive fares/schemes to meet the challenge. Low-cost carriers are attracting a lot of rail passengers owing to their innovative schemes. This has further stimulated the growth of the air transport sector.

What is the government's future plans for Alliance Air?

It is presently operating with an ageing fleet of 11 B-737-200 aircraft. The average age of the Boeing fleet is in excess of 23.5 years. Aircraft utilisation, therefore, has declined in the recent past.

Further, the entry of new airlines has resulted in a large number of pilots and technical personnel leaving the airline. These factors have adversely affected the operations of Alliance Air.

The government cleared the purchase of 43 Airbus Industrie aircraft by IA on September 7. This will enable Alliance Air to replace its Boeing fleet with new generation A-319 aircraft over the next three years or so. Alliance Air also plans to induct five A-319 aircraft on lease to progressively replace the Boeings. It also plans to wet-lease one A-319 aircraft from Druk Air and lease another six ATR aircraft.

How does the government plan to handle the expected huge increase in passenger and cargo traffic in the coming years?

We have decided to upgrade the Delhi and Mumbai airports through the joint venture route. In principle, a decision has been taken to upgrade Chennai airport under a similar mode. Work on two greenfield airports, at Devanahalli near Bangalore and at Shamshabad near Hyderabad, is in progress. Approval has been given, in principle, to the construction of a greenfield airport at Mopa in Goa. There are plans for the construction of greenfield airports at Navi Mumbai, Chakan near Pune, Ludhiana in Punjab, Kannur in Kerala, Pakyong in Sikkim and Kohima in Nagaland.

What is the progress on the greenfield airport front? And what about the expansion of existing airports in big towns?

In the case of Bangalore airport, financial closure was achieved on June 23, 2005 and the construction of the first phase is likely to be completed within 33 months of this. In the case of Hyderabad, construction of the first phase is likely to be completed within 36 months of financial closure.

As for the greenfield airport in Mopa, the International Civil Aviation Organisation (Icao), engaged to conduct an economic feasibility study, has already submitted an inception report .

The government has also decided to modernise 25 tentatively selected non-metro airports to world-class standards in phases. Indian Financial Consultant (IFC) and Global Technical Advisor (GTA) have been appointed to conduct techno-economic feasibility studies of 10 airports to evolve an appropriate model, based on the viability of the project in the first phase.

The parliamentary standing committee on transport has demanded that the proposed modernisation of Delhi and Mumbai airports be shelved. Your views on this...

The government is examining the recommendations and an action taken report (ATR) will be furnished in due course. As of now, the government has short- listed eight consortia on the basis of 'expression of interest' and they have been issued 'request for proposal' documents and copies of the draft 'transaction documents'. These pre-qualified bidders are expected to submit their financial and technical bids by September 14. The whole transaction is likely to be finalised by the year-end.

The joint venture companies (JVCs) which will be managing Delhi and Mumbai airports will be mandated to undertake certain urgently required development projects. For long-term development, the JVCs will formulate a master-plan for a 20-year period. The initial masterplan will be submitted within six months of the date of execution of the Operation Management and Development Agreement (Omda) for review and comments by the government.