Aviation Ministry rules out privatisation of Air India, to rein in predatory pricing
In a stern message to all airlines, the Ministry has said that they should “self-regulate” ticket prices, else it would be forced to intervene.
On the issue of capping economy class airfares in the case of extreme pricing, sources in the Ministry said: “As of now, the Ministry would have preferred that airlines themselves did not indulge in excessive pricing of tickets. They should themselves show some discipline, but whether the time has come to consider a policy shift in this matter remains to be seen. Airlines should ensure they self-regulate the prices of tickets. Opportunistic pricing, whether it is extortionary or predatory in nature is not acceptable.” The sources added that there are no immediate plans on privatising Air India.
The Ministry also has a new reinvention roadmap in mind, “Consumer protection is topmost on our list of priorities, and then comes growth of the airline sector. These two – air travellers getting the best services at optimum cost and that holistic growth of the aviation sector – are key thrust areas.
Sometimes there may be a clash between the two and our focus will be to strike the right balance,” said sources in the Ministry.
The Ministry is also all set to phase out the existing 5/20 rule and introduce a new civil aviation policy in a month’s time. Under the 5/20 rule, carriers had to be in operation for five years and have an operational fleet of 20 aircraft in order to be eligible to fly abroad. “The replacement of 5/20 rule and new aviation policy are in final stages and should be finalised in a month.
The Ministry does not believe that these issues are contentious in nature. The primary issue is that right balance needs to be struck at all levels to carry out work in a Ministry. Arguments on removing 5/20 Restriction are being heard. Also, there needs to be a certain granularity during the process of consultation before a final decision is taken on an issue,” said sources.
Sources said that the search for the new chairman and managing director for the national carrier Air India was going on.
“We are working on finding a successor (as incumbent CMD’s tenure is ending in August). We are working to ensure that there is no discontinuity or gap in the functioning of Air India,” added sources. The incumbent Rohit Nandan’s tenure expires in August and the government has to take a decision before that.