New Delhi: K.N. Srivastava has taken over as aviation secretary in August, when passengers are shying away from air travel because of high fares and airport charges, which is affecting the growth of aviation. In an interview, Srivastava said his focus in the next few months will be to build five new airports, revive the industry, provide incentives to air taxi entrepreneurs and reduce the cash deficit at Air India. Edited excerpts:

What are your plans for India’s airport infrastructure?

The kind of growth airport infrastructure should be making, it is somehow not making. Ultimately, the growth can come if you are able to enhance your infrastructure facilities by way of new greenfield airports, by way of developing a large number of smaller airports.

In this connection, our priority is that major cities—Mumbai, Pune, Goa and Patna—should get greenfield (new) airports because these are all very potential cities. As a matter of fact, Mumbai needs the second airport as early as possible because even with all the improvements that have been made at Mumbai airport, it is not going to take us too far. The capacity is going to get saturated very soon.

We will be inaugurating Chennai airport soon. But when it comes to an assessment of the existing infrastructure, with whatever additions, it will get saturated in the next six-seven years. That being the case, there is an urgent necessity for taking up the greenfield airport project at Sriperumbudur (near Chennai). A second airport in Chennai would become essential. Navi Mumbai is making good progress.

The existing Patna airport has all kinds of capacity problems. It has to have a greenfield airport. We are working out the details.

What happens to Air India?

So far as Air India is concerned, the bailout package has already been approved by the government of India. We are very closely monitoring all the 12 laid down parameters and, as contemplated, the future financial support is incumbent on the performance on the agreed parameters. The good thing is Air India has shown very good progress. In fact, Air India has done better than what has been prescribed on those parameters. So far, the results have been quite good.

The cabinet has approved hiving off of MRO (maintenance, repair and overhaul) and ground handling of Air india. We would now be ensuring that these two companies become functional in the next two months. Air India is also coming with a VRS (voluntary retirement scheme) package, so that staff who want to take VRS can be facilitated. Overall, our effort is to see that in the shortest possible time their cash deficit vanishes. We want Air India to move from the red to the black side.

There have been some issues with equity not being released and bonds issued by the finance ministry.

The finance ministry had sought some clarifications on the bonds, which we have provided. After all, that is a decision taken by the cabinet. There are some issues of implementation which have to be sorted out across the table. It (the issues) has been sorted out now.

What can private airlines expect?

So far as other airlines are concerned, their operational part is concerned, they are very capable. They are doing their job well. However, there are certain common issues which are coming in the way of growth of all these airlines and as a matter of fact, the whole civil aviation sector as well.

The main issue is the ATF (aviation turbine fuel) price. ATF is the costliest in India. This has become costly for three reasons. One is the lack of transparency in ATF pricing, the second is the availability of infrastructure at an airport. Airports do not have a provision of open access and because of that a monopolistic situation has arrived, and a healthy competition which ought to be there in terms of ATF supply is not there. We would like that this issue gets addressed. The third issue is airport charges and air navigational charges are very high. Of course, when you compare with leading international airports, you do not get a picture that our airports have become more expensive—they are still comparable. But still, we have to consider our local situation and we must ensure that all such charges, which are ultimately adding to cost, are brought to a level where all the stakeholders are able to function in a healthy manner and the condition is created for the sector to grow as such.

Recently, it was noticed that there has been a decline in air traffic. There could be general economic factors which are reflecting in every other walk of the economy in the country, but high airfares are also responsible for that. Airlines have been advised to look into this aspect of high airfares also. They must consider the overall revenue generation rather than having seats vacant yet charging high airfares. We have been having regular meetings with players of the airline industry and we deliberate over all these matters.

Is there a new policy on the anvil?

We are very keen to promote regional connectivity so that this air transport facility becomes available to large number of tier III cities. For this purpose, we should create a model or have a policy which ultimately encourages all the carriers to operate on these regional routes as commercially viable proposition, and in order to achieve that whatever support is legitimately required from the government of India, state governments, from other stakeholders, those things, we are having a look at it. Ultimately create a situation where operators have complete confidence on their returns while operating regional routes.

We are very keen that air taxi service does very well in India. We would like to promote that one also as a major initiative from the government side and whatever the bottlenecks in terms of inadequacy of infrastructure, inadequacy of other logistical support, we would like to address those issues. We would like to see a situation where a large number of youngsters, young entrepreneurs see air taxi as a good venture. Such ventures are going to generate a lot of employment across the country.

What is the difference between regional airlines and air taxi operators?

Today, we are trying to achieve the regional connectivity with what you call the route dispersal guidelines, which means non-profitable routes are getting cross subsidized with profitable routes. Now we are trying to create a condition that whatever support is to be given for making the operation in non-profitable routes as a commercial viable operation, the support from the central government and states should come upfront and other stakeholders who have to play a part should render their assistance upfront.

It should not be through surrogate and indirect ways. If I am asking, let’s say Jet Airways (India) Ltd to fly to the North-East, Jet thinks many times because they know it is operationally not going to be profitable, but if I create a model where the operations will be profitable, why should any airline hesitate.

What incentives will air taxi operators get?

Incentives are a matter of detail. But we will be identifying what kind of support state governments are readily agree to give, what can we provide, what can Airports Authority of India give, because ultimately if you want these regions to develop, then all the important stakeholders must play their part.

The main thing is that you identify the routes where you would like them to fly, these are the destinations, then you create airport infrastructure there, you provide navigation which can be free, you provide security which they don’t have to pay, then again for smaller airports have security infrastructure requirements it should not be costly. And then state governments can be asked to give tax relief on fuel. Air taxi will be non-scheduled operators.

The cost of air taxi aircraft is very manageable. It’s a couple of crores. An entrepreneur can have five aircraft investing some 8-10 crore and can have a good business. There is a huge interest. Wherever I go, there is a pent-up demand. Such as—‘you have an air taxi to Agra?’ Any number of people would like to go to Agra. We will have an air taxi operation policy in the next three months.

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