No decision taken on privatising Air India: Gajapathi Raju

The Centre is close to finalising a short-term strategy to strengthen the burgeoning civil aviation sector, including slashing taxes on jet fuel, civil aviation minister P Ashok Gajapathi Raju said on Tuesday. The minister also formally announced Air India's membership into Star Alliance and added that the partnership is expected to boost the country's national carrier's revenue by five per cent. Air India passengers will enjoy alliance benefits from July 11.

"By and large, there is a general feeling that the aviation sector in India is no way near its potential. So we are working on that and trying to achieve that potential... We are working out a short-term strategy, setting some goals for ourselves within the ministry," Gajapathi Raju told reporters here on Tuesday.

Gajapathi Raju was responding to a question whether the ministry had formulated a 100-day plan for the aviation sector after he recently met Prime Minister Narendra Modi. When asked whether Air India's privatisation was discussed during his meeting with Modi, he said the national carrier formed 'a substantive part' of the discussion.

"All issues relating to Air India was discussed. No decision has been taken and I would not like to stir up a hornets' nest."

Civil aviation secretary Ashok Lavasa said: "A few specific citizen-centric initiatives have been identified. We are working on them and will make them known in a few days." On high sales taxes on aviation turbine fuel levied by states, Raju said the government is trying to take the states into confidence on the matter so that some relief can be granted to the aviation sector.

"The taxes vary from state to state. On the aviation side, they want the taxes down. We have to talk to the states as we are in a federal structure," said the minister. The integration teams at Air India, Star Alliance and its member carriers will now complete the last necessary work to ensure that Air India can offer all Star Alliance customer benefits from July 11. Air India's induction into the Alliance will add a total of 400 daily flights and 35 new destinations in India to the Alliance network.

"The biggest growth will come from Air India's home market, which is currently being served by 13 Star Alliance members flying to 10 destinations and holding a 13 per cent market share. Bringing Air India into the equation not only adds more airports, but also increases the Alliances market share in India to 30 per cent," Star Alliance said in a statement.