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15 September 2012

Policy change will elevate mood of the sector: Ajit Singh, Minister, Civil aviation

Policy change will elevate mood of the sector: Ajit Singh, Minister, Civil aviation

As the government takes the crucial decision of allowing foreign airlines to buy up to 49% stake in Indian airlines, civil aviation minister Ajit Singh has stolen the limelight for pushing this policy initiative within a few months of taking charge of the ministry. This much-awaitedpolicy initiative has been languishing for the past many years. In an interview to ET's Anindya Upadhyay,

Singh tells how his good personal relations with many ministers, in addition to emphasis on the importance of the sector, helped in bringing about the policy change.



What has happened in the past eight months of your tenure to make the policy change to take place?

The importance of the sector dawned upon the government, especially in the backdrop of the acute financial crisis that the industry suffered in the past one year. It is not only about putting in money in domestic airlines, which are severely cash-starved, but also the possibility of strategic competence, new technology and higher service standards. This policy change will elevate the mood of the sector.

What did you do to garner allies' support within a few months?

I have good relations with many ministers and I spoke to them about the benefits of this policy change on a personal level.

Do you fear that Mamata Bannerjee may oppose opening up the aviation sector to foreign players?

As far as I understand, there is an assurance of no opposition to this matter.

Though you speak of this policy change bringing in much-needed funds for our airlines, experts say that it can't be a panacea for a debt-laden sector...

I agree it is not a panacea for our airline industry because we need to resolve the issues of high cost that plague the sector. However, you have to look at this policy from a long-term view. To help this market to grow and have a bright future for aviation, we need this policy.

There are some views that this initiative is targeted, especially to help out Kingfisher Airlines, instead of shutting it down. The closure of this airline can affect many government arms like banks, oil companies and result in the Airports Authority losing money?

I have said before also that a policy initiative is made for an entire industry. I would like to ask you, is there any industry where the government shuts down a loss-making company? That's not the government's business. We will only look into ensuring safety of operations.

So, which Indian carriers are looking at a foreign tie up?

Jet Airways and IndiGo have a lot of foreign money as they are held by NRIs. I don't think they are interested in selling stake further. Kingfisher Airlines does say that it has tied up with a foreign investor, GoAir also conveyed that it would be interested. SpiceJet has talked about a stake sale to a foreign airline openly. That's why I was saying policies are made for a sector.

Could Air India also be looking at selling stake to a foreign airline?

Air India may not opt for this route as the government has given it enough money.

Source : The Economic Times

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