Bigger skies

New Delhi, Jan. 2: The group of ministers on the civil aviation policy is likely to take a call tomorrow on relaxing the experience required for Indian airlines to fly abroad.

Top civil aviation ministry officials, however, said if the ministers were not able to resolve their differences on this issue, the GoM may choose to go ahead with the aviation policy, while reserving this issue for further consultations.

The civil aviation policy is a set of guidelines that will govern the industry in the years ahead.

Railway minister Lalu Prasad had objected to norms being relaxed for airlines wishing to fly abroad at a meeting of the GoM held last month. Civil aviation minister Praful Patel wants to do away with the experience-based eligibility norm altogether. He wants to bring in a set of guidelines for case to case clearances of plans to fly abroad.

The civil aviation ministry wants the requirements for flying on international routes to be based on technical and financial parameters. However, some other ministries want a clear cut formula to be kept ready so that no airline can claim it has been discriminated against.

At present, only airlines with at least five years of experience, a minimum of 20 aircraft and a paid up capital of Rs 100 crore can fly abroad.

Officials said most domestic carriers were hit by rising costs and low ticket prices because of competition, and a way of helping them out would be to let them operate on lucrative foreign routes, where margins were higher. But airlines such as Jet, who already operate on these routes, will resent such competition as it can result in price competition there too.

Eligible airlines are entitled to a portion of new foreign routes or flights which come up for allotment according to a formula based on their fleet strength.

Officials said there were differences on other issues too. The home ministry had sent a note stating the management control of domestic airlines should be “retained in government or Indian hands”.

The home ministry said it had no objections to current or proposed FDI ceilings in aviation, but management control should remain in Indian hands.

Analysts have pointed out that even with a 49 per cent stake, foreign investors can control an airline if there were no other investors with larger holdings.

The finance ministry and the Planning Commission want to open up domestic airlines to equity infusion by foreign airlines. The home and civil aviation ministries are against any such move.

The home ministry has also come out strongly against allowing independent private ground handling companies, arguing they could pose security risks.