Civil Aviation Minister Ajit Singh talked about the latest happenings in Indian aviation sector at the recently concluded Routes Asia 2013 in Mumbai
After 2007, it seems Air India will post a positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) of Rs 20 crores this financial year despite Dreamiliner are being put on hold. Next year, we hope to make a positive EBITDA of Rs 1000 crores. In 2011-12, our EBIDTA was negative by more than Rs 2000 crores. Meanwhile, Air India’s market share over last few months has increased to 20 per cent from 15 per cent. The load factor is 71.8 per cent compared to 67.9 per cent last year. On Time Performance is 85 per cent compared to 75 per cent last year. Yield is Rs 4.31 per km against Finance Ministry’s requirements of Rs 3.50 per km. Aviation sector is improving and faith is back in the aviation sector.
We also want Kingfisher to restart their operation. However, they have not yet provided a feasible and credible plan. Unless they give a credible plan that they can restart with safety and enough financial depth to maintain that schedule, DGCA will not consider. The detailed plan has not been submitted to DGCA as of yet.
India allows foreign airlines to invest as much as 49 per cent stake in local airline firms. It is not an issue whether this investment is happening before the joint venture is formed or after. There could be some procedural issues that AirAsia-Tata joint venture could face. But there is nothing to worry about. There are policies that are followed before granting a license. Any airlines need to get a no-objection certificate from Ministry of Civil Aviation. The home Ministry checks the background of the Directors of the airline. Civil Aviation Ministry also checks about their capital requirements before issuing a no-objection certificate. The airline needs to get an air operating permit from Directorate General of Civil Aviation (DGCA). TATA-AirAsia JV will have to go through these processes. A lot of data and information are required from them as safety is a big issue. If the joint venture provides timely and correct data to the ministry, there won’t be any delay.
We will not able to tell anything till the deal is signed and sealed. It is taking place purely on a commercial basis. A private company is talking to other private company. I will not be able to give more details. However, the sentiments looks positive as Jet recently sold its London airports slots to Etihad Airways and leased the same back. This shows that the deal is on track. We are going to talk to Abu Dhabi as the bilateral rights are almost utilised. We are also positively considering Jet’s request to extend the code-sharing agreement with Etihad. Things are looking good and possible now.
According to the information from Boeing and FAA (Federal Aviation Administration), Air India will be able to fly Dreamliners in April.
We cannot compromise on safety. We are second to none in the world on safety. International Civil Aviation Organisation (ICAO) did a safety audit in October 2006. Recently, ICAO conducted an ICAO Coordinated Validation Mission of India in December 2012. They assessed and validated the India’s updated corrective plan based on the findings and recommendation of ICAO audit. They visited India to know about the steps taken on the implementation of audit of 2006. In the verbal discussion, they raised some concerns. They visited Air India, Jet, Air India Express and Spicejet, Patna and Jaipur airports, and ATC Tower in New Delhi. They said India had a Lack of effective implement (LEI) of 34 per cent in 2006. Based on their December review, India’s LEI has come down to 20 per cent which is low in APAC region that has an average LEI of 39 per cent.
We met Maharashtra Chief Minister to discuss new airport in Juhu in Mumbai. Due to continued delay in Navi Mumbai airport, Juhu Airport has become very important for Mumbai to maintain its stature of financial capital. Some progress has been made during the discussion. After two years, Santa Cruz will not be able to accommodate more flights. We also discussed reduction in ATF taxes with Chief Minister. There was some request for enhancing connectivity from Aurangabad and Nagpur to gulf and other international destinations from Maharashtra.