This Is Why Air India, Airports Are Being Sold To Private Firms: Civil Aviation Minister Gives Explanation

Union Civil Aviation Minister Hardeep Singh Puri announced on Jan 6 the target set by his ministry to operationalise 100 unserved and underserved airports and starting at least 1,000 air routes under the UDAN (which stands for Ude Desh ka Aam Naagrik) scheme. The scheme seeks to attain the objective of making air travel affordable and boosting “regional connectivity”

Privatisation not just Government Prerogative

In response to uncertainty over the government handing over the reins for upgradation of airports to private firms, Puri stated that the aviation industry needs privatisation since it is not just the duty or prerogative of the government to run airports. 

Despite the fact that there are several airports at present which are being successfully run, Puri noted the increase in activities that private capital encourages. 

The comments were made in the context of the Union Budget 2021-22 in a press conference conducted in a BJP office in Chhattisgarh, Kushabhau Thakre Parisar. Here, Puri also assured that domestic flight routes from Bilaspur, also in Chhattisgarh, is set to begin from March 1. Alliance Air, an Air India subsidiary, has been assigned the Bilaspur- Prayagraj-Delhi route.

New addition to UDAN-RCS Scheme

According to the minister, the aviation ministry has targeted operationalisation of 100 unserved and underserved airports. They also intend to improve regional connectivity by adding at least 1,000 new air routes. 

This comes on the back of Union Finance Minister Nirmala Sitharaman’s announcement last year of the Centre’s plans to set up 100 more airports by 2025 under its Regional Connectivity Scheme.

As part of RCS, airlines would compete for subsidies for running flights that link small airports to the bigger ones. 

RCS, which was launched in October 2017, is currently in its fourth phase and carries a budget of Rs 4,500 crore. 

Puri provides update on success of ongoing UDAN Scheme

Since inception of the scheme in 2017, 56 airports have been upgraded and more than 700 routes have been awarded, 311 of which have already begun service. 

Response to criticism by Rahul Gandhi

When asked about the new Budget, Puri noted the positive response all over the country by observers and commentators alike along with the stock market reflecting the same. 

Rahul Gandhi, however, remarked that the Budget reflected the Centre’s intentions to privatise Public Sector Undertakings. Puri promptly replied that Congress-led UPA government was to be blamed for the weak economic condition of Air India. 

Presently Air India is burdened by a massive debt of Rs 60,000 crore, and Puri said that its privatisation has been underway since long now, and that NDA will eventually have to materialise it.

The minister has reassured the public of the transparency of the process of privatisation of Air India which will be undertaken through open bidding. 

Upgradation and opening of new airports in India is a massively important task to bring the country into the modern age. With cooperation and collaboration between both parties, setting aside political differences, will also be just as big an undertaking and one that prosperity of the country depends on. 

Airports starting to be sold to private firms in a major step toward disinvestment, learn more