Jyotiraditya Scindia, who was instrumental in toppling the Congress government and helping the BJP return to power in Madhya Pradesh, will now head the Ministry of Civil Aviation (MoCA), replacing Rajya Sabha member from Uttar Pradesh Hardeep Singh Puri.
Interestingly, after taking charge on Thursday, Scindia will occupy the post which his late father Madhavrao Scindia once occupied, from 1991 until 1993 in the PV Narasimha Rao cabinet. He has held charge as Minister of State for Power in the Manmohan Singh ministry in the past.
Along with Scindia, the ministry has also got a MoS with general VK Singh, who represents Ghaziabad, assuming charge. The two leaders have taken over the civil aviation ministry at a time when the sector is one of the worst affected areas due to the pandemic.
Challenges for Jyotiraditya Scindia
Transition to Free Market: The industry has been reeling under a capacity cap as well as a floor and ceiling price for airfares since flights resumed on May 25, 2020. While rules do allow the government to make such a move, no other industry has been put under such barriers post-Covid and it may prove to be detrimental in the long run.
Hardeep Puri, the outgoing minister, had made multiple statements on when he expects the air traffic to be back to pre-Covid levels but none of them turned into reality.
Air India Disinvestment: It is still unclear how many bidders made it to the last stage of the airlines divestment or what is the step forward, even as it is often said that things are working out and a winner may be announced in the next couple of months. According to a report in MoneyControl, a razor-sharp focus is needed until then to ensure that the process is not derailed since this is the closest any government has ever got to divestment in the national carrier. The future of Alliance Air on its own will also have to be charted out, lest it becomes another Air India.
Regional Connectivity Scheme: A pet scheme of the prime minister, RCS-UDAN has not seen the kind of success which it should have. After multiple rounds of bidding, the operational routes remain less than 50 percent of what was bid out, the MC report stated.
Airlines like Air Deccan, Air Odisha have gone belly up while Spicejet has cancelled multiple routes which it started. The aim of having 100 new airports (including seaports and heliports) is also turning out to be a pipedream.
Privatisation of Airports: While privatisation has been in the pipeline for a while, reduced air traffic amid the coronavirus pandemic means it would be difficult to attract more players, even as the Adani Group had earlier won the concession agreement at some airport. But even here, there is a delay in take-over of airports as the next set of privatisation of airports started rolling just before the pandemic hit.
Airport Infrastructure: According to the report, the airport infrastructure in the country was being utilised at its peak pre-pandemic. Mumbai has run out of capacity and the case is no different at most other airports which are in top 15 in the country. Lack of space to expand civil enclaves at defence airports has meant that flight operations can’t grow beyond a limit at Pune, Goa, Vizag, Port Blair and Jammu amongst others, the MC report further stated.
ATF: The demand to move Aviation Turbine Fuel (ATF) under the GST regime has been on for years together. Even before GST was implemented, there were demands to have a flat rate of taxation across the country. Neither has happened, the report said. As fuel prices start inching upwards, it is causing more pain for the airlines than ever before.
Air Safety: India experienced a fatal crash last year in Calicut after a long gap. An audit from ICAO and US regulator FAA is on the horizon but the report is still pending. Any adverse observations will lead to airlines from India not being able to add new routes to the United States, the report said.
All eyes are now on Scindia on how he navigates through for a smooth landing amid the rough weather of Covid-19.