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No wonder, Singh has acquired a reputation of a no-nonsense administrator and policy-maker. Air India pilots will vouch for that. They took him on — and lost.
On the policy front, Singh was quick to address structural issues that make Indian aviation less competitive — cabinet approval for 49 per cent FDI in airlines, opening up import of ATF, signing more bilateral air services pacts which allow private airlines to fly more international routes, and doing away with Air India’s first right of refusal. Also, he got a Rs 30,000 crore bailout package for Air India.
Singh is even lobbying hard for other structural changes. The high cost of ATF and airport charges have always been a concern for the sector. The petroleum ministry has already agreed to include ATF in the list of notified commodities which is expected to bring more transparency in pricing. The cost of ATF, with 24 per cent sales tax added, makes up 45-50 per cent of the input costs of airlines. But bringing down sales tax is yet to be achieved.
Emphasising particularly on regional connectivity to Tier III and Tier IV cities, the ministry is about to come out with new Route Dispersal Guidelines which aims to subsidise routes with low viability. But experts believe that this renewed policy may not find takers on the ground.
Singh, an IIT alumnus and M-Tech from the University of Illinois, worked for 17 years with IBM in the US before he joined politics in 1986. Ever since, he has cultivated the image of a “kisaan” leader, taking on the mantle of his father and former prime minister Chaudhary Charan Singh. Anyone who visits his home after 3 in the afternoon will find him addressing farmers from his constituency.
Many officials in the ministry appreciate Singh’s sharpness and grasp of the sector. But he is known to be the power centre and hog the limelight — both within the ministry and in Air India.
Curiously, the views of Singh and his officials have been at variance on many issues recently. For instance, the ministry favoured addressing Air India’s concerns over the Jet-Etihad deal. Rohit Nandan, Air India chairman and managing director, had written to the ministry saying that the deal would encourage Etihad to use feed from Jet’s network and fly them ahead of Abu Dhabi. But Singh advocated complete open skies and told Business Standard, “The decision to allow FDI in aviation has been taken in overall interest of the sector and not for a particular airline. There is no reason for any airline to complain about it now.” It will lead to better growth in the sector and bring in management expertise, he added. Singh also rubbished speculation that the ministry was thinking of restricting Jet’s city pairs to Abu Dhabi.
Last year, IndiGo’s demand for 16 aircraft was slashed to five. Since 2011, the final approving authority for all aircraft acquisition has been the civil aviation minister. So did Singh put a spanner in the works for Indigo? “The carrier did not comply with the guidelines of the new Aircraft Acquisition Committee,” sources close to the ministry say. The IndiGo spokesperson, of course, denies this. Whatever be the truth, there is no doubt Singh is trying his best to open up the Indian skies.
