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New Pot Of Gold
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COVER STORY: GOVERNMENT

It's rare to find A bigger misfit between the beliefs of a minister and the demands of his ministry. Sharad Yadav and the Civil Aviation Ministry are just not made for each other. The minister revels in the mismatch: "In this country where crores of people have no other mode of transport but walking, concern for aviation is very elitist." No wonder in his two years in the ministry, his heart has never been in the job. From airlines to airports and the hotels runs by his ministry, the changes during his tenures have mostly been for the worse.

Last year IA reported losses of around Rs 177 crore after three profitable years. A-I has been flying losses for six years now, and room occupancy rates of Hotel Corporation of India, a hotel chain run by A-I, have dropped drastically with two of its five hotels closed. No private investment in any metro airport has taken place despite opening up of airports to private investment-Indian and foreign-last year. The disinvestment of A-I and IA has hit an air pocket, with A-I left with just one prospective buyer and IA none. A new civil aviation policy is being drafted for the past six years. All that adds up to quite a report card for a minister.

Promptness of response 5.0 Understanding of issues 1.0 Commitment to reforms 1.0 Openness to ideas 1.0 Achievements 1.0 Average score 1.8 OVERALL RANK 8 All ratings are on a scale of 10
"In a country where people have no other mode of transport but walking, concern for aviation is very elitist." Sharad Yadav

Sure, disinvestment of the two airlines is being done by the Disinvestment Ministry, but Yadav's opposition to privatisation is more than an open secret. Last year, a conceptually bewildered Yadav had told India Today that he was open to A-I privatisation with government control. Whatever the minister meant, it was evidence of how much he is out of his depth in the ministry. Things haven't change in the past year. They have only become worse-a state of collapse which Disinvestment Minister Arun Shourie believes is being encouraged "to benefit one private airline". It's a serious charge and one that implies an ailing psu is being wilfully kept sick to benefit competition.

The excuse of pending privatisation has been used to sit on long overdue decisions, critical for the viability of IA and A-I. The major decisions on hold are:

Purchase of 50-seater aircraft for high demand short haul routes for IA has been pending since 1993.

Lease of four aircraft for IA under discussion since 1999. Two have been inducted in May this year.

A-I's fleet expansion is in a limbo. The airlines fleet shrunk to just 23, before two planes were inducted this year.

Caught between a still-born disinvestment and non-infusion of funds, the airlines are limping. A-I has not only one of the smallest fleet but also the oldest (average age of aircraft 23 years) and most staffed (750 employees per plane) airline in the world. Its destinations have shrunk by a third in a decade, though Yadav has been able to earn some money by selling bilaterals (allowing other airlines to use destinations that A-I has, but is unable to use). But aviation experts believe that while sale of bilaterals will shore up revenues and capacity temporarily, it could hurt the long-term viability of the airline. IA too has in the past year raised its market share, but by keeping the air ticket prices lower than its competitors, and thus creating a big hole in its balance sheet. The future of IA's subsidiary, Alliance Air, also hangs in balance.

Undaunted by the mess, Yadav claims that he will "bring the airlines to a no-profit-no-loss state". The use of the terms itself reeks of a socialist hangover according to which PSUs in India were supposed to function in an imaginary situation in which they would neither make profit nor losses. Among his other achievements, Yadav counts installation of a Rs 422-crore satellite-based surveillance system in Delhi and Mumbai, classification of seven airports as international airports. What he forgets to add is suspension of A-I managing director in May this year without any replacement so far. That's at a time when competitors are resorting to every trick to eat away the remaining market of A-I.

With a minister as clueless as Yadav, there is no hope of an early take-off for India's civil aviation. He is a walking advertisement for the belief that India can well do without the burden of state-owned national airlines.

MetroScape

Looking Glass

Delhi Exhibition:
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Delhi Night Club-Restaurant: Nyx

Mumbai Lifestyle Store: Yantra

The male model is an unwanted species now. Nothing, not even their opouts, poses and exposes, is helping him turn the corner. An epitaph by INDIA TODAY's Himanshi Dhawan in
Preety Boys No More