New Delhi, Feb 8: Former Civil Aviation Minister Praful Patel has strongly opposed NDA government’s proposal to hand over substantial control of Indian airlines to foreign carriers, terming the suggestion “ridiculous” and saying such a move, if approved, would harm national interests.
Patel, during whose tenure the civil aviation policy was formulated, also stressed that the government should not be seen to be favouring select Indian carriers while bringing in a new policy and instead ensure a level-playing field for all of them, while continuing the “time-tested” route dispersal guidelines to ensure air connectivity across the country.
Asked about the proposal to raise the FDI cap in airlines from 49 to beyond 50 per cent, he said “all over the world, the issue of substantial ownership and effective control (of an airline) is very minutely scrutinised” as aviation industry is different from any other and is affected by several factors including external.
“I am surprised that the draft aviation policy carries a provision to increase the FDI limit over 50 per cent. That is ridiculous. You have already done 49 per cent. 50 per cent or more will hurt the country,” Patel said.
He said the United States does not allow more than 25 per cent voting rights by foreigners in an airline’s board, while in Malaysia and Singapore, “you may not be allowed to buy into their airlines … Do these countries have reciprocal policies (on FDI in airlines)?”
“If the country’s carrier has to carry the Indian flag, its foreign ownership cannot be 50 per cent or more. It (increasing the existing FDI limit) will hurt the country,” he said, adding that an airline that carries the national flag on its tail has to be substantially owned by Indians.
Stressing the need for having national flag carriers, he said “this template also goes against the spirit of the ICAO resolutions”.
The UN body ICAO (International Civil Aviation Organisation) has evolved a series of rules and procedures on various aspects of the aviation industry business which are being followed by all governments and their airlines.
Regarding the 5/20 norm which allows an Indian carrier to launch global operations after flying five years domestically and having a fleet of 20 aircraft, Patel said the government has to ensure a level-playing field vis-a-vis the existing carriers and “should not appear to favour the new entrants”.
