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Corporate Jul 12, 2012

Why DGCA Bhushan got the boot instead of Kingfisher

By R Jagannathan

Did the Director-General of Civil Aviation (DGCA) EK Bharat Bhushan lose his job because he planned to be tough on Kingfisher Airlines? It's a trifle odd that when it's the airline that needs a push to put it out of misery, it is the regulator who gets the heave-ho.

Bhushan was removed as DGCA on Tuesday barely hours after he told Firstpost that he may be taking a tough call on Vijay Mallya's floundering airline in a day or two. He told us that even though the airline was sticking to the schedule it gave the regulator in February, it had still not submitted its recovery plan.

"This is completely unacceptable. We are very concerned and in a day or two we will come to a decision on Kingfisher", Bhushan told Firstpost, but within hours he was gone, having lost the confidence of Civil Aviation Minister Ajit Singh.

Bharat Bhushan had taken a tough stance on many issues. Screen grab from CNN IBN

Clearly, there is more to it than meets the eye. Bhushan's extension as DGCA had been approved by the appointments committee of cabinet (ACC) just last week. He was to hold charge till 1 December 2012 or till a full-time replacement was found, "whichever is earlier."

So what was the tearing hurry to shift him out and replace him with another stopgap, Joint Secretary PN Sukul, which too needs the nod of the ACC?

The shift seems murky since Bhushan himself was quoted by The Indian Express as hinting at collateral motives behind his ouster. Asked to speculate on his removal, he said: "I am surprised as only last week I got an extension from the appointments committee headed by the Prime Minister. I am not an astrologer to know the reason why I was removed. I do not want to speculate... but I won't let anyone shoot from my shoulder."

The last statement, "I won't let anyone shoot from my shoulder" is significant. Who was trying to shoot from his shoulder? Ajit Singh? Or someone more powerful?

And did his ouster have anything to do with the proposed tough line on Kingfisher, which Bhushan was hinting at? Why is Kingfisher being given such a long rope by the ministry?

As Firstpost reported on Tuesday, there was a good chance of Kingfisher losing its Scheduled Operator Permit (SOP) if it continued to "suffer extreme financial stress" and was unable to maintain the integrity of flight schedules, causing extensive passenger inconvenience. The failure of the airline to pay its dues to pilots - some of whom are on strike - may have tipped the odds against Kingfisher retaining its SOP since the last thing an airline needs is disgruntled pilots worried about their livelihoods.

BusinessLine reported that Bhushan "is believed to have ruffled feathers in the domestic industry by his tough stance on forcing airlines to lower fares and seeking a comprehensive audit of their finances and safety norms." The newspaper indicated that the DGCA may have "issued orders that either debt-ridden Kingfisher Airlines pay its employees their past wages in the next 15 days or shut operations."

Business Standard reported much the same thing, and so did The Times of India, which speculated that Bhushan was removed since some of his decisions "may have earned the ire of the ministry". It noted that the former DGCA "had taken a tough stand on cash-strapped Kingfisher Airlines" and that Bhushan may have been planning to "recommend to the ministry this week that Kingfisher's operations be stopped on safety grounds unless it agreed to pay salaries within a timeframe."

Insiders in Delhi's corridors of power suggest that apart from Kingfisher, the ministry has also been unhappy with his attitude to Air India and his tough line on the fake pilots scam. Last year, the DGCA discovered that several pilots belonging to different airlines had given fake mark-sheets and flying licences, leading to the suspicion that top elements in the DGCA must have colluded in this scam. Bhushan had taken a strong line on the scam and could have built enemies in aviation's established babudom.

One puzzle is why did Bhushan get an extension if Ajit Singh was not happy with him? Insiders suggest that Bhushan was not without his backers at the top of the bureaucratic pyramid, and has had close linkages with the Malayali bureaucratic lobby which once clout reaching upto the Prime Minister's Office. This clout could have helped the appointments committee of cabinet to approve his extension, but Ajit Singh apparently wants his own man - Arun Misra, who is currently India's representative in the International Civil Aviation Organisation (ICAO). The Times of India reports that Misra's file is pending with the department of personnel. The plan is to bring him in as DGCA and send Sukul, the stopgap after Bhushan's exit, to take up Misra's posting at ICAO.

The moot point is whether a sinking sector like aviation can afford this kind of power-play and backroom skullduggery when it needs a clean broom.

by R Jagannathan

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