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We are motivating Indian aviation players to perform: Ashok Gajapathi Raju

The government has finally cleared the aviation policy, allowing Indian carriers to fly international without completing five years of local operations.

, ET Bureau|
Jun 16, 2016, 05.13 AM IST
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"In aviation, we want our Indian players to serve Indian skies. The five years and 20 aircraft norm was not serving Indian skies at all, " said Raju.
"In aviation, we want our Indian players to serve Indian skies. The five years and 20 aircraft norm was not serving Indian skies at all, " said Raju.
The government has finally cleared the aviation policy, allowing Indian carriers to fly international without completing five years of local operations. But the new policy makes it compulsory for airlines to have a fleet of 20 aircraft and operate 20% of the capacity in the domestic sector to fly abroad. The government’s message through the policy is: “Let us play together … Let all thrive”, a visibly tired aviation minister Ashok Gajapathi Raju tells ET. Edited excerpts:

Since day one, you have favoured complete abolition of 5/20 policy, but that does not seem to be happening. What is the reason?
In aviation, we want our Indian players to serve Indian skies. The five years and 20 aircraft norm was not serving Indian skies at all. Theoretically, an airline could have taken all its flights abroad. This rule of 20 aircraft (and 20% local deployment) will help serve the Indian skies.

CEOs of new carriers said they would have loved to see complete abolition of 5/20...
Some carriers would be thinking like that. But then, once you are easing out, you need to do it in steps and not hogging out. To my mind, it is important that the Indian carriers serve Indian skies. At the same time, we also have unutilised bilaterals (to fly to overseas locations) and we are motivating Indian players to perform. The performance in terms of usage has surely improved in the past two years, but we need to improve further.

All of us are aware of the bitterness the 5/20 rule has created between incumbent and new carriers. How much did that impact government’s decision on 5/20’s future?
The airlines wanted level playing field. On 5/20, there was a feeling that this rule is stifling growth and should go. The incumbent airlines complained that they had to go through it and their books were impacted. Now, if you look at the college kid as example, this logic —that since someone was ragged in college the future generations should also be ragged — would not hold. This was a very contentious issue and we wanted all points of view and, hence, did not decide on the future of 5/20 during the draft stage. We wanted all views on 5/20 and this churn was good and it gave us many views.

On the regional connectivity bit, how difficult will it be to convince states to contribute their share of viability gap funding for the flights?
This VGF on regional routes will not be there for eternity. By getting the states on board, the plan of the states get a priority. We have built airports that are not functional and they are like nonperforming assets. The states, who come forward, will have an advantage. Our focus will be providing regional connectivity equitably across all regions of the country. Even the growth in aviation today is not uniform across all states. And, states that have reduced VAT on fuel are seeing higher growth in passenger numbers. A lot of states already have the regional connectivity scheme and they will be more than willing to work with the Centre on regional connectivity.

Allowing airlines to do ground handling would mean a change in the policy that earlier was to allow ground handlers do it…
Governments cannot be discriminatory. You have to be uniform and forward-looking. You have to look at it in its totality. Nothing has been changed and nothing has been done out of the blue. Since the draft policy, we have had a wide range of consultations, never ever attempted by the aviation ministry in the past.

Why did you junk the proposal of auctioning of bilateral rights?
This has implications with other departments. We have set a formula, which is that the bilateral rights will be negotiated only if Indian carriers utilise 80% of the allocated bilaterals. For all other conditions, the cabinet secretary will work with secretaries of all departments and find a way. It is easy to identify a problem … (but) very difficult to find a solution. The whole idea is to move towards solutions.

What will be your message to airlines?
Airlines have a bright future within India. India is one of the few economies in the world that is behaving itself. We have a great future. Harness it. Grow. Let us all play together and nobody wants anybody to lose anywhere. Let us play together. Let more people also come in. Let all thrive.

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