ED probing Air India's flying rights pacts with Gulf countries

NEW DELHI: The Enforcement Directorate (ED) is investigating bilateral air services agreements signed with West Asian countries between 2001 and 2012 as well as aircraft purchases by the state owned Air India during that period, said people with knowledge of the matter. Besides examining the “policy decisions” taken by officials, ED has sought documents from the civil aviation ministry as part of its probe into the procedures followed by the Congress-led UPA governments (2004-14).

The investigation, which follows an audit report and inquiries by the Central Bureau of Investigation (CBI), will also look into the impact that the bilateral agreements had on the operations of debt-laden Air India.

The carrier is currently seeking yet another government bailout after a privatisation effort came to nought earlier this year.

“ED has sought details of bilaterals signed with Gulf countries between 2001 and 2012 and documents signed with Dubai, Sharjah and Qatar during the period,” said a senior government official, who did not want to be identified. “ED is also looking into the government’s decision to sign separate bilaterals with Dubai and Abu Dhabi and not one bilateral with the United Arab Emirates.”



Abu Dhabi, Dubai and Sharjah are members of the seven-emirate UAE. Sources told ET that the documents along with comments of airlines made at the time have been sought to “investigate whether any exceptions” were made to “benefit” some companies.

At the time of negotiations over bilaterals, the ministry typically seeks the views of Indian carriers as to whether they need flying rights with a particular country or not. The ED sources cited above added that the agencies are also looking into allegations made by a former joint secretary of the civil aviation ministry on the bilaterals and the involvement of non-state entities.

AI PURCHASES
Air India and Indian Airlines had signed a deal in 2006 to purchase 111 planes from Boeing and Airbus between 2008 and 2017 for a list price of $11 billion as part of their expansion plans. The two state-owned carriers merged in 2007.

“Documents have been sought to look primarily into the policy decisions and purchase of (planes) during the said period,” said one of the people cited above. “The files are being looked into, after which the role, if any, of concerned officials, will be gone into.”

The documents received so far are being examined to see if any “rules were relaxed” to illegally benefit private entities, the persons said. The officials under the scanner are not posted in the aviation ministry now, sources said.

The Comptroller and Auditor General (CAG) had in a 2013 report on Air India said that the over-generous expansion of entitlements beyond genuine requirements for point-to-point flights, such as India-Dubai, did not provide a level playing field for Air India. The report also said that the state-owned carrier’s interests were not protected as it did not get reciprocal entitlements, especially when these were sought for Dubai. ED’s probe is a result of first information reports (FIRs) registered by CBI, which is enquiring into alleged irregularities concerning the purchase of planes, aircraft leasing, diversion of routes and the establishment of an Airbus maintenance, repair, overhaul and training facility that allegedly involved its executives.

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