The Hindu Business Line : Clear IA, Air India fleet expansion soon: Panel

THE Parliamentary Standing Committee on Transport, Tourism and Culture has recommended that all necessary clearances and approvals for the fleet expansion plans of both Indian Airlines (IA) and Air India (AI) should be granted at the earliest.

The committee, in its seventy-seventh report tabled in Parliament on Tuesday, has also said that the induction of new aircraft and the optimum use of the existing fleet by IA would go a long way in increasing its "market share, efficiency and profitability."

While the Public Investment Board (PIB) meeting to take up the more than Rs 10,000-crore 43-aircraft fleet acquisition plan of IA was recently postponed, the Ministry of Civil Aviation has only recently received the 28- aircraft fleet expansion plan of AI.

Further, the committee has said that it "fails to understand" why the Government is following two sets of rules for public sector undertaking (PSUs). The report, while noting that the fleet expansion plan of IA has been held up for the last one-year as the company was rostered for disinvestment, has said that it is "aware" another PSU, the Shipping Corporation of India, which is also proposed to be divested has placed orders for acquiring nine vessels in October 2002. Interestingly, the committee had in the fifty-ninth report on Demands for Grants 2002-03 of the Ministry of Civil Aviation highlighted the fact that the Government's decision not to procure any new aircraft for AI and IA pending divestment of the two airlines has "adversely affected" both of them "financially and commercially".

The report adds that the "indecisiveness" of the Government has already resulted in "considerable loss" for the two airlines.