New aviation policy hits air pocket

Differences over a decision on the fleet expansion plans of Indian Airlines and Air-India to soften the blow represented by permission to let domestic airlines fly foreign routes, have been at the heart of the postponement of a Cabinet decision on a new civil aviation policy.

Officials have accepted that lobbying and corporate war has led to the new civil aviation policy being caught in the crossfire.

The government had proposed to buy 43 aircraft from a global aircraft manufacturer at a cost of Rs 11,000 crore (Rs 110 billion).

The proposal had been made by the civil aviation ministry and was to be cleared by the public investment board.

The simultaneous decision to allow domestic airlines fly foreign sectors would have met the repeated grouse of PSUs like Air-India and Indian Airlines that in opening up the skies (that the new aviation policy was supposed to herald) the government was actually sounding their death knells.

The PSUs said they were unable to keep up their bilateral commitments because they didn't have enough aircraft. It would also have made the open skies policy politically more acceptable.

However, rival aircraft manufacturers have complained of lack of transparency. A meeting of the PIB was postponed ostensibly because it was too close to the dissolution of the Lok Sabha. So one part of the package deal fell through.

Although the agenda for the Cabinet meeting on February 4, that was circulated late in the evening, did not have clearance of the new aviation policy as an item, a supplementary agenda was circulated following instructions from the top echelons of government.

Preparations had already been made that should the issue of a new aviation policy come up for discussion, it would be prudent to closely examine all aspects, including the related agenda of purchase of aircraft. What was to have come up for examination was a package deal.

But this didn't happen. Instead, two former civil aviation ministers -- Syed Shahnawaz Hussein and Sharad Yadav -- who had been nursing a grudge for their unceremonious removal from the ministry to bring in more "efficiency," decided to speak up on the issue of removing the 'protection' to the national carrier.

Although Hussein did not get a chance to speak because of paucity of time, Yadav is learnt to have marshalled "economic arguments" to rubbish the proposed policy.

Yadav pointed out that the proposed policy tilted heavily towards one private airline and was designed to deal a body blow to national carriers like Indian Airlines and Air-India.

Much of what Yadav said was the part of his stated view on the issue when he had headed the civil aviation ministry.

The issue, which evoked intense debate, prompted Yadav to say that by allowing the private airlines to fly abroad, the national carriers would die.

Sources in the government pointed out that Hussein had also armed himself with facts and figures to oppose the policy on the ground that it was tailored to benefit a private airline.

Both ministers were stung by the implied criticism of the way they had run their ministry when they were in charge.

Yadav, being an influential leader of the JD(U) - a National Democratic Alliance ally, could afford to hit back in order to restore his lost prestige. However, Hussein kept silent.

But what appears to have deflected the whole debate is the focussed opposition by Divestment Minister Arun Shourie on the security aspect.

"Most of the members got involved in an emotional issue which was irrelevant," confirmed a union minister.

Shourie referred to the doubts about ownership of Jet Airways as his reason to postpone the creation of a new civil aviation policy.

Union Culture Minister Jagmohan added his bit to further the argument that . "We should not allow economic issues to take precedence over security," Jagmohan is learnt to have stated.

Union Water Resources Minister and Shiv Sena leader Anant Geethe also chipped in with those opposing the policy in tune with the line of the Shiv Sena leadership which has considerable influence on the trade union activities of the national carriers.

The voice of Deputy Prime Minister LK Advani who is entrusted with the task of maintaining internal security was lost in the concerted opposition to the proposal.

Advani is learnt to have made it clear that despite charges of foreign ownership, intelligence agencies had not found much against the airline that was expected to corner the maximum benefit from the policy.

"Even the home ministry has cleared that private airline," said a former union civil aviation minister.

But there was a broad consensus on only one aspect : it was bad politics to bring up this issue on the eve of Lok Sabha polls.

Even Union Parliamentary Affairs Minister Sushma Swaraj said in the meeting that the issue would trigger serious political controversies and must be abandoned forthwith.

Swaraj urged all Lok Sabha members of the Cabinet, including a rattled Union Civil Aviation Minister Rajiv Pratap Rudy to rush to the Lok Sabha, where voting for the vote-on-account was scheduled.

However, it is clear that the whole episode had a subtext that was neither articulated nor publicly stated -- the issue of the purchase of new aircraft before private airlines were allowed to compete with the national carrier.

If the same government returns to power, aircraft purchase for the national carrier is expected to top its agenda.