Malaysia-based AirAsia Group CEO Tony Fernandes had instructed his team in India to play 'dirty' to get permits for international routes. Business Today is in possession of an audio conversation where former CEO of AirAsia India Mittu Chandliya is giving a presentation to his boss Tony Fernandes in the presence of lobbyist Rajender Dubey.
The discussion revolves around the aviation regulations, international flying permits, the Narendra Modi government, Tata Group chairman emeritus Ratan Tata and competition, especially SpiceJet. The audio is peppered with a lot of loose talk and abuses. It could nail Air Asia and its boss who has been booked by the CBI for allegedly bribing government officials. Air Asia has denied these allegations.
In the conversation, Fernandes says that he is ready to get the international routes for AirAsia India through "dirty ways". "I am going to lose money. This is going to take a long time if we have done it the clean way. I say we do it the dirty way, but I want to get international routes faster," Fernandes says in the audio. BT could not independently verify if it is Fernandes's voice on tape.
When Chandilya confirms this with Fernandes, he replies with a yes. "Just do it. I was not open to do it for the license." Fernandes says that "we are too slow. I am not going to waste another 20-30 million digging around. 3-4 million - whatever it takes."
In the audio, Chandilya says that he knows exactly the person who can help with the five year rule. "From the regulatory standpoint, we need an entirely different strategy. We have to go top and all the levels down," Chandilya says.
Fernandes says that he is not going to get involved. He asks Chandilya and Dubey to negotiate because they are on the ground. "It has to be you ultimately. If you go international, I will give more planes," Fernandes tells Chandilya.
The 33-minute conversation starts with distress at the rival airline SpiceJet and how pilots are leaving the airline in huge numbers. In the middle of the conversation, Fernandes asks about the tax rates and tells the other two people to "get the tax to zero, and get the international tax to minimum. Let's have five year deal with airports."
In the tape, Chadilya talks about his closeness to the then aviation minister A. Gajapathi Raju. Chandilya tells Fernandes that N. Chandrababu Naidu was potentially the prime minister candidate, but he is now the chief minister of Andhra Pradesh.
"His finance minister is now the civil aviation minister. If you play nice with Chandrababu Naidu, we will get everything. The civil aviation minister told me. They want to build Vizag into aviation centre. They are willing to give zero tax on ATF [aviation turbine fuel] as long as we put a hub there. The minister told me that he doesn't want to be seen physically with me that much, but you tell me what you want. This guy is like [Narendra] Modi. It's good to have him on our side," Chandilya tells Fernandes.
The Air Asia chief was booked, earlier this week, by the CBI (Central Bureau of Investigation) for allegedly bribing government officials to amend the once-controversial 5/20 rule that mandated airlines to have five years of experience and a minimum of 20 aircraft to fly on international routes. The CBI has said that the payments of about Rs 12.28 crore were remitted to India to lobby with civil servants during the UPA rule.
On Friday, the CBI summoned Malaysia-based Fernandes on 6 June to probe his involvement in breaking rules while obtaining an airline license. The CBI has also summoned the director of HNR Trading Dubey, who has also been named in the FIR filed by the agency.
CBI raided multiple offices of AirAsia on Tuesday and filed a series of cases against "unknown public servants" of the civil aviation ministry and the then Foreign Investment Promotion Board (FIPB), along with Tata Trusts' R. Venkataramanan, and T. Kanagalingam, Deputy CEO of AirAsia Group.
Venkataramanan, whose laptop, iPhone and computer hard drives were seized by CBI on Friday, has denied the allegations."It is commonly known that the present accusations qua Air Asia India find their root in baseless allegations made by Cyrus P Mistry and the Shapoor Pallonji Group against Tata Trusts Trustees (me included) and Tata Sons in his 'revenge' legal actions," he said in a statement.
An email sent to AirAsia executives seeking response on the airline's involvement in graft allegations has not been answered. The story will be updated once the company responds.