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Patel on how Air India will regain its lost glory

Last updated on: January 13, 2011 14:01 IST

Patel on how Air India will regain its lost glory

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The civil aviation ministry recently held a series of meetings to review the restructuring exercise of Air India, besides related issues.

In an interview with Sanjay Jog, minister Praful Patel explains his stand.

Edited excerpts:

What's the road ahead for Air India, especially when Deloitte has charted out a restructuring plan?

The Deloitte plan is under consideration of Air India. The ministry is yet to go through it.

Will the carrier regain its lost glory?

Definitely, in the very near future. A number of initiatives have been taken, including financial restructuring, government support, strict monitoring, improvement of on-time performance and passenger service, as well as rationalisation of routes.

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Image: Praful Patel.
Photographs: Reuters
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What will be the strategy?

The short-term steps are government equity support and turnaround in operational revenues. In the medium term, government guarantees for acquisition and working capital loans; in the long term, debt restructuring/financial restructuring.

The employee unions are not fully supportive, being more worried about jobs. How will you take them on board?

We will be looking at integration of human resources to common practices. There is a no retrenchment policy. We are also looking at creation of two strategic business units, which will absorb a lot of manpower.

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Image: An official looks at the newly introduced first class cabin section in Air India's new Boeing 777-20
Photographs: Punit Paranjpe/Reuters
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Patel on how Air India will regain its lost glory

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Critics say the ministry's policy is responsible for the present state of affairs of Air India, as it helped private airline companies to grow.

There is no truth in this.

There has been decontrolled growth of the private sector. Besides, Air India was unable to expand to meet the growth in passengers.

Growth in traffic will always exceed Air India's ability to serve the numbers, leaving ample space for expansion of the private sector.

What about AI's low-fare carrier?

As of now, Air India Express is only for low-cost international services and it is doing reasonably well in its segment.

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Image: Air India aircraft.

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Patel on how Air India will regain its lost glory

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There was talk of revamping the operations of Air India Express.

Steps have been taken, including shifting of maintenance facilities to Kerala. Air India also plans to shift AI Express' headquarters to Kerala.

The sector recently witnessed a surge in fares and the ministry had to intervene. Has the time come for a regulatory authority?

Air fares in India are decontrolled.

While the ministry has already set up a Civil Aviation Economic Advisory Committee to look into various economic aspects of fares, it may not be a good idea to set up another regulatory body, as the Competition Commission of India is already mandated for the purpose.

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Image: Air India Boeing.

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Patel on how Air India will regain its lost glory

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Is the sector able to meet rising demand or will the mismatch grow?

The sector will be able to meet the demand.Tremendous investments in infrastructure from within and from outside will support the growth in overall traffic.

What will be the nature of the new independent authority to look into security aspects?

The Bureau of Civil Aviation Security is mandated to look into all aspects of civil aviation security. There are proposals for a separate Airport Security Force.

These proposals are under examination and the International Civil Aviation Organisation report in this regard is awaited.

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Image: Air India aircraft.

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What is happening on the modernisation of airports?

The modernisation, of the six metro airports and 35 non-metro airports, is on schedule. Airports Authority of India has invested Rs 10,030 crore (Rs 100.3 billion) till date in the 11th Plan period and has a provision of further expenditure of Rs 2,980 crore (Rs 29.8 billion) for the remaining period of the 11th Plan.

The joint venture airports, namely, Delhi, Mumbai, Hyderabad and Bangalore, have jointly incurred an expenditure of Rs 27,979 crore (Rs 279.79 billion) till date.

The figures for the 12th Plan are still being worked out.


Image: Air India mascot Maharaja.

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