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Parliament members rally in support of Tata airline project

Even as the Centre and the Tata group are engaged in a fresh war of words over the recently-withdrawn Tata domestic airline project, a group of members of Parliament has rallied in support of the project stating that successive governments, in dealing with the proposal, have made a mockery of the open sky policy.

They have also voiced concern over the unfair treatment meted out to the project. This comes close on the heels of Aviation Minister Ananth Kumar's observation that the proposal was not clear on the composition of foreign institutional investors who were to take 40 per cent equity in Tata Airlines which had led to a delay in decision on the project.

The standing committee on transport and tourism, under the chairmanship of Vijay Kumar Malhotra, had a two-day meeting in New Delhi recently where the MPs extended unanimous support to the Tata airline proposal stating that its should be cleared.

Omar Abdullah, who could not attend the meeting, said, in a letter to the committee, that it was unfair that while the Tata group proposal for establishing an airline was being delayed all along, others like Jet and Sahara have been permitted to add to their fleet. The open sky policy now seems to have more than one way of interpretation.

According to Abdullah, the players have been allowed to enlarge their fleet in spite of the fact that the primary reason given to Tata for non-clearance of the project has been that their entry would harm the interests of Indian Airlines.

Although IA unions are vocal about threatening strikes because of Tata's proposed airline, it does not seem to bother them one bit that Jet and Sahara are continuing to add to their fleet on a regular basis, he said.

He sought to allay fears stating that there was no reason to feel threatened as IA was more than a match for any private airline was.

There is no reason for IA to feel threatened, unless, of course, they are unable to match the exciting standards that a private airline would set.

He further stated that several private players, including Modiluft, Damania and East-West, were allowed to enter the fray but several of them could not survive. Why is it that government after government feels that Indian Airlines, although surviving in the face of competition from Jet and Sahara, will have to close shop if the Tatas are given permission.

He further stated that the unions have been very vocal about their belief that a technical agreement with Singapore Airline will allow them to enter the market from the back door. However, a similar arrangement between Jet Airways and Malaysian Airways has not had the same impact.

On the concerns that the 40 per cent equity would be held by foreigners, Abdullah said it was not illegal as per the revised policy so long as the foreign parties are not airlines.

''Why is it that nothing is said about the fact that 100 per cent of Jet Airways equity is foreign? I believe that the matter is a simple one that has unnecessarily been complicated. If our open air policy is being used to safeguard the interests of IA then we should do away with the policy and shut down existing private airlines so that we do not use the same set of rules to protect one or more private airlines at the cost of another,'' he added.

Kumar had recently stated that the Tata proposal was not clear on the composition of the FIIs and whether any link existed between one of the FIIs -- the Singapore Government Investment Corporation and Singapore Airlines.

But Tata Industries Limited had refuted the observation, stating it had not provided any definite names of the FIIs investing in the project. The FIIs would decide on equity investment in a domestic airline only after suitable government approvals were received.

Meanwhile, TIL, in a letter to the standing committee, had stated that the policy was within Indian aviation policy.

On the reason for withdrawing the proposal, TIL said the repeated deferment of a decision on the proposal had made it clear that the government policies have been thwarted by vested interests who are keen to ensure that a particular airline is protected from competition so that it may thrive in a virtual duopoly of Indian skies.

''We believe there is a disconnection between stated government policy and its implementation. Better sense, dignity and prudence, therefore, demanded that we should not wait endlessly. We after very careful consideration withdrew our application with the ministry of civil aviation,'' TIL's resident director Sujit Gupta said.

UNI