'AI's plane acquisition was necessary to survive competition' | india | Hindustan Times
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'AI's plane acquisition was necessary to survive competition'

india Updated: Sep 08, 2011 17:14 IST

Praful Patel, who headed the civil aviation ministry in the UPA-I government, on Thursday defended the decision to acquire 111 planes for Air India, saying there was no other way for the airline to compete internationally at that time.

"In 2004, Air India and Indian Airlines had 93 aircraft, most of which were 20 years old. There was no way the airline could have withstood the global competition with these planes," Patel, who is now the heavy industries minister in UPA-II, told reporters here.

His comments came soon after the Comptroller and Auditor General (CAG) questioned the civil aviation ministry's decision to acquire 111 planes for Air India through debt, calling it "a recipe for disaster".

Terming the move for acquiring a "large number" of planes as "risky", CAG in its report tabled in Parliament today, said the aircraft acquisition had "contributed predominantly" to the airline's massive debt liability of Rs 38,423 crore as on March 31 last year.

"Whatever the government did in its wisdom was to make the airline commercially viable. We had to decide immediately as to whether new planes should be bought otherwise the airline would have closed down," Patel said.

He added that if 17 months (of completing the aircraft acquisition process) is steering hurry, "then let us fix some time frame for this process to happen."

Patel said that the entire ambit of the government, including the Planning Commission and the Public Investment Board, was involved in the process of fleet acquisition.