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Air-India to lease ten aircraft; minister promises turnaround in one year

The government today said it has decided to lease ten aircraft for Air-India.

Civil Aviation Minister Sharad Yadav today informed the Rajya Sabha in response to a Calling Attention Notice given by Sanjay Nirupam if the Shiv Sena and others regarding poor performance and mismanagement of Air-India that the Caribjet deal probe has been handed over to the Central Bureau of Investigation to ensure that the guilty were punished.

(The CBI is to take up investigations into the Caribjet wet-leased deal of Air-India. "We've written to the CBI and it'll be handled led by them," Civil Aviation Secretary Ravindra Gupta had said in Bombay on February 19, 2000. Sharad Yadav had sought a probe into the deal, including payment of compensation of Rs 1.03 billion to Caribjet by an international arbitration court in London. Air-India had taken two aircraft on lease from Caribjet in September 1995 for two years, but cancelled the deal a year later. In January 1997, Caribjet started arbitration procedures and asked for Rs 4 billion in damages.)

Yadav justified productivity linked incentives paid by the national carrier to its staff which was a subject of criticism by members during the course of the discussion.

He disclosed that the loss-making airline was to absorb another 2,500 workers on the direction of the high courts.

He said in order to reduce the workforce, the management has extended leave without pay from two years to five years. He said there are persons who draw more salary than the President of the nation but raise slogans and are covered under the Trade Unions Act.

Yadav also announced that the government has decided to have a comprehensive and transparent policy on travel agents.

He said the haj pilgrims issue is being dealt with by the external affairs ministry.

He said, ''I assure the members that within one year, the working of Air-India would be improved.''

Santosh Bagrodia of the Congress said that Air-India has incurred losses of Rs 15 billion during the last five years. He said this is a commercial organisation and it should be run like one.

M P A Samad Samadani of the Muslim League demanded a reduction in the air fare from Kerala to Gulf destinations as Air-India's rates "are very high".

Jibon Roy of the Communist Party of India-Marxist urged the government to go in for a through enquiry of all assets of present and past senior officials of Air-India and those found to possess wealth more than their source of income should be punished.

Vayalar Ravi of the Congress also demanded a lowering of the air fare from Kerala to Gulf destinations.

Leader of the Opposition Dr Manmohan Singh of the Congress requested the chair to direct the government to make public the names of all those politicians who have availed the hospitality of Centaur Hotels but not paid their dues.

Earlier report: Air-India divestment under 'active consideration', says aviation minister

The recommendations of the Disinvestment Commission on restructuring of Air-India are under active consideration of the government, Civil Aviation Minister Sharad Yadav told the Rajya Sabha, the Upper House of Parliament, today.

Replying to a Calling Attention Notice given by Ssanjay Nirupam and others on the poor performance and mismanagement of Air-India, the minister said the losses of the national carrier have been brought down to Rs 897.5 million in 1999-2000 from Rs 2.969 billion in 1996-97.

He attributed the losses to increase in expenditure on account of interest and depreciation on new aircraft and cost of operations, besides increase in wage bill.

Yadav assured the members that the government would spare no effort to improve the functioning of Air-India. Steps like rationalisation of air routes, introduction of voluntary schemes and abolition of posts abroad will be taken to improve its financial performance.

Nirupam said the market share of Air-India in the country had come down from 20 per cent to 12 per cent. He urged the government to take remedial steps to make Air-India a profit-earning company.

Nirupam warned that divestment of Air-India will not solve the problem. ''What is required is the Air-India board should be constituted with professionals.''

He said only the poor management was responsible for losses in the country's flagship airline in the past five years.

He wanted to know how the general services agents or GSAs of Air-India were making profits when the airlines was running into losses. He alleged that the retired A-I officials had their stakes in GSAs.

Prem Chand Gupta of the Rashtriya Janata Dal demanded an inquiry into why Air-India, which had been making profits for so many years, started making losses in the past five years. He said one of the main reasons could be that A-I had the lowest utilisation of aircraft a day.

While the utilisation of aircraft in Singapore Airlines was about ten hours, Japan Airlines's figure was 11.35 hours and Lufthansa's more than 12 hours. It was as low as 3.5 hours for Air-India.

Air-India is a commercial organisation and should be managed by professionals, he said and supported the viewpoint of Nirupam that the A-I board should be overhauled.

Praful Patel of the Nationalist Congress Party expressed surprise that A-I had just 26 aircraft, while private airlines that had come a few years ago had 29 aircraft. Most of the aircraft with the A-I are also more than 22 years old, he said and suggested that the the capacity of airlines be augmented and aging aircraft be replaced. He also warned that privatisation would not solve the problem of the company.

Bratin Sengupta of the Communist Party of India-Marxist questioned why the government was not allowing Air-India to modernise its fleet.

Narendra Mohan of the Bharatiya Janata Party) said while Air-India was incurring losses, it had paid to its employees Rs 7 billion as productivity incentives which had destroyed work culture in the organisation.

He said it was surprising that pilots and other crew members in Air-India, who earned fabulous salaries, were ''workers'' under the law and were covered by the Industrial Disputes Act. Mohan added that multiplicity of trade unions was not conducive for Air-India's profits.

UNI

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