Probe of Air India, Indian Airlines to cover gamut of ₹45,000-cr deals

Our Bureau New Delhi | Updated on January 12, 2018 Published on May 30, 2017


‘All stakeholders’ in merger of state-run airlines on CBI radar

The CBI’s decision to probe the merger of Indian Airlines and Air India, the purchase of 111 aircraft from Boeing and Airbus, and alleged irregularities in the purchase and lease of aircraft by the two state-owned airlines comes in the wake of the Supreme Court setting the investigating agency a June deadline to complete the case.

On January 5, the apex court had given a direction on a petition filed by the Centre for Public Interest Litigation led by lawyer Prashant Bhushan.

On Monday, the CBI registered three FIRs and a preliminary enquiry (PE) to go into the decisions taken by the Manmohan Singh government, including surrender of profitable routes to favour private airlines.

The cases were registered against unidentified officials of Air India, Ministry of Civil Aviation and others under charges of criminal conspiracy, cheating and corruption. CBI sources said “all stakeholders” were under its scanner.

Finance Minister Arun Jaitley had recently said the government was open to strategic divestment of Air India, which had a debt of ₹50,000 crore and a market share of 14 per cent.

Both Air India and Indian Airlines have been dogged by controversies since the Manmohan Singh government assumed office in 2004. In September 2005, Indian Airlines signed a ₹10,000-crore deal to acquire 43 Airbus A-320 family aircraft.

Months later, Air India acquired 68 Boeing aircraft at over ₹35,000 crore. This too ran into controversy; government officials who had objected to such a large number of aircraft being ordered were reportedly shunted out before the deal was inked in January 2006.

In 2007, the government completed the Air India-Indian Airlines merger into one airline under the name Air India. But problems soon emerged between the staff of the airlines.

Before the merger, the airlines followed different human resource management policies. The then Civil Aviation Secretary told the Parliamentary Committee on Public Sector Undertakings that unless there was a merger in “the hearts of the people” the new airline will not work as intended.

Under the Manmohan Singh government, the number of domestic carriers increased with IndiGo, Go Air, Kingfisher Airlines and SpiceJet taking to the skies. This too led to controversy as it was alleged that Indian Airlines was pressured to give up preferred times of operations in favour of private airlines. It was not uncommon for a flight by a private airline to depart on the same route a few minutes before an Indian Airlines’ flight.

While the Manmohan Singh Government had three civil aviation Ministers, Praful Patel was Minister when Indian Airlines and Indian Airlines ordered the aircraft, the merger took place between the two airlines and many new airlines took off.

Published on May 30, 2017
This article is closed for comments.
Please Email the Editor