Parliamentary panel wants checks on airline mergers

NEW DELHI: Apprehending "monopolistic situations" in the wake of acquisition of Sahara Airlines by Jet Airways, a Parliamentary Committee has said there was a need to 'check the trend'.

"Of late there have been changes in the strategy of private airline operators by way of consolidation of their operations.....these conditions can lead to monopolistic situation in the civil aviation sector and there is a need to check this trend," the Committee on Tourism, Culture and Transport, chaired by Rajya Sabha MP Sitaram Yechury, said in

its report tabled in Parliament.

The committee said while formulating the new civil aviation policy, all consequences of mergers of airlines, including the matter of reallocation of infrastructural facilities at airports should be addressed properly.

It also came down heavily on Air India for "lack of transparency" in its procedure while negotiating a wet-lease accord of one A340-330E aircraft last year, which it said was "against the practice of open competitive tendering process".

"The procedure followed by Air India was against the practice of open competitive tendering process and therefore lacks transparency," it said.

The committee said Air India had approached only Jet Airways in July 2005 to negotiate the wet lease of one A340-330E aircraft.

"Air India could have approached other airline organisations," it said, adding the carrier could have anticipated the impending shortage early had there been a constant assessment of available aircraft capacity.

The parliamentary panel said adequate contingency plans should be prepared, including standing arrangements for lease of aircraft during exigencies by following proper tendering process.

It also criticised the Civil Aviation Ministry for the under utilisation of traffic rights given to private airlines to fly to the US and Belgium.

"Despite the permission granted to private carriers to operate services to USA and Belguim, the services have not commenced and it is surprising that the ministry has left the matter to the commercial judgement of the concerned airlines," it said.

The committee said there should be proper monitoring of the permissions granted by the ministry and "it must be ensured that the actual operations are started by the operators so that the stated objective of optimum utilisation of traffic rights is achieved."

It also said the Civil Aviation Ministry must take necessary steps to ensure that time schedules fixed for the delivery of aircraft to Indian Airlines and Air India were adhered to so that "the national carriers are able to take maximum benefits of exemption from payment of tax under Section 10 (15A)".