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Corporate Jul 15, 2013

Lobby against Jet named but what about bilateral's impact on Indian players?

By Sindhu Bhattacharya

New Delhi: Finally, after many insinuations and thinly veiled references, officials of the Civil Aviation Ministry have come out and named two rivals of Jet Airways who have been lobbying against the revision of the India-Abu Dhabi bilateral on flying rights. IndiGo and GoAir.They have also named three Members of Parliament, all from the main opposition party, the BJP, who are involved in lobbying against the bilateral revision.

A story in Business Todayalleges that IndiGo and GoAir have been approaching specific BJP MPs seeking support against the bilateral revision. India and Abu Dhabi have agreed to revise weekly seat entitlements of airlines from both countries four fold by 2015.

Firspost was the first to dare Civil Aviation Minister Ajit Singh and his officials to quit making "corporate lobby" allegations and name and shame these corporate houses.

Debarka Banik/Flickr

Debarka Banik/Flickr

The fact that the minister and his officials have paid heed to our advice is heartening. But it does not still answer the fundamental questions we have been raising about the bilateral revision and the indisputable and deep links with the subsequent equity deal between Jet Airways and Abu Dhabi's flag carrier, Etihad Airways.

Also, by just saying that IndiGo and GoAir are lobbying against the deal through BJP MPs, it seems as if ministry officials are now saying that actually, the equity deal between Jet and Etihad is all right, the bilateral revision is ok too - it is just politics which is holding up both these events which could save the life of a moribund Jet Airways. And that politics is being played by the BJP.

The Business Today story quotes an unnamed ministry official saying there is no chance of New Delhi revisiting its decision on bilateral seat revisions. If there is not even a chance of the bilateral being reviewed, why take it to the Union Cabinet for a final ratification? And why try and expose the lobbying which is against the bilateral? Why bother to name these lobbyists?

Besides, BJP MPs are certainly not the only people opposed to the bilateral revision. The Prime Minister's Office (PMO) has named MPs from different parties in its clarification on the India-Abu Dhabi bilateral controversy last month. It is clear that the PM has received representations and letters from various MPs opposing the bilateral, not only from those belonging to the BJP. One letter was in fact from an MP belonging to the Congress party!

A press release from the PMO mentioned letters from CPI's Gurudas Dasgupta (May 1), CPI's Prabodh Panda (May 2), Congress' Sucharu Ranjan Haldar (May 3), Janta Party's Subramanian Sway (May 29), BJP's Jaswant Singh (May 31) and BJP's Ajay Sancheti (June 21).

Subsequently, BJP's Nishikant Dubey has sought an inquiry by the Central Vigilance Commissioner and the CBI into the bilateral revision. He has also alleged irregularities in the notification which the DGCA issued over FDI policy allowing foreign airlines to invest in Indian carriers as also in Jet's sale of its London Heathrow slots to Etihad.

Like we said earlier, intense lobbying is a risk all corporates run when game-changing decisions which favour only one company in a sector are taken in undue haste by the Government. What, as we said earlier, should cause more worry is the access some of these lobbyists have within the highest decision making bodies of the Government. That IndiGo and Go Air have such access is still a matter of speculation.
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In fact, this entire debate over whether rivals want Jet-Etihad equity deal to collapse is a no brainer. Of course they would move heaven and earth to get a large airline like Jet out of their way. What needs answers now are these queries:

1) Will the Union Cabinet now weigh all the pros and cons before taking a decision on the bilateral pact between Indian and Abu Dhabi in the light of allegations against the pact and also after taking into account the alleged under-preparedness of other Indian carriers to offer seats on the India-Abu Dhabi sector?

2) Will the generosity shown to Abu Dhabi now be extended to its cousins Qatar and Dubai too since Qatar Airways and Emirates are also seeking a large increase in weekly seat entitlement from Indian cities? Will then other contenders like Turkey, Singapore etc also get their fair share of weekly seat enhancements?

3) How does the Government see Air India's international operations and indeed its very survival when intense competition from Gulf carriers will push it to offer long haul, direct flights out of Delhi to Europe and the Americas?

The Business Today story points out that R K Singh, a former Joint Secretary in the Ministry of Civil Aviation, is a consultant with IndiGo and has helped draft letters sent by MPs opposing the bilateral enhancement. Well, we are sure many other such seasoned bureaucrats are available for rival airlines also to craft their future strategies. And don't tell us Jet is a babe in the woods when it comes to lobbying with whichever government is in power at the Centre to get favourable policies drafted in its favour.

So instead of shedding tears for Jet, perhaps the ministry of civil aviation should now get down to mapping a roadmap for the near term survival of Air India and of other airlines in a fiercely competitive, high-cost environment.

by Sindhu Bhattacharya

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