IndiGo alleges tinkering with policy to help select airlines

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SME Times News Bureau | 23 Jul, 2012
Taking a dig at the central government for approving an operational turn-around plan for the debt-ridden and loss-making national carrier Air India by infusing equity, InterGlobe, which owns IndiGo, Saturday said the government is "tinkering" with policy for a select few in the airline industry.

"We always knew we will have an artificial competitor in Air India. Air India in its current state and form will always have issues. What we did not know was the government's relentless effort to keep it afloat," InterGlobe group managing director Rahul Bhatia said during the annual general meeting of Indian Chamber of Commerce (ICC) here.

IndiGo, set up in early 2006, is now among the three largest airlines in India.

Bhatia said the government policy of giving sops to loss-making airlines would not be effective in the long-run and eventually the firms with low-cost structures would survive.

"We (IndiGo) are probably the only zero debt company pitched against competitors who keep getting sop after sops. This game would not go on for long. Companies with low-cost structure will survive," he observed.

"Our principle issue has been why the government is tinkering with policy for a select few in the industry. When do you stop giving relief to people who are inefficient?" Bhatia asked.

He said the government must take decisions which were good for the industry and not good for only a selective few in the industry.

The union cabinet has recently approved an operational turnaround plan for debt-ridden Air India through an equity infusion of Rs.300 billion (Rs.30,000 crore) over the next eight years.

The InterGlobe chief also lashed out at the central government for taking "discriminatory" measures and said it was "frustrating" for IndiGo.

"On paper we are allowed to fly to other countries. But when we make an application, the government gives the right to a selective few. We would love to fly but the government holds on to those rights. This is severe discrimination and it is frustrating," Bhatia said.