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Pvt. airlines want govt bail out
Published on 1 Aug. 2009 12:18 AM IST
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India’s private airlines Friday threatened not to fly from Aug 18 if the government fails to announce a bailout package to help tide over the ongoing crisis which they claim has escalated their collective losses to over $2 billion. The decision was taken at a meeting of the Federation of Indian Airlines (FIA), a representative body of private carriers, to discuss the current situation in the country’s aviation sector and the way forward. “Unless the government bails us out we will not be able to sustain operations,” said Anil Baijal, secretary general of the federation, adding member carriers were already burdened by low fares and a sharp dip in passenger traffic. State-run Air India was not part of Friday’s discussions. “We are bleeding. Everybody is bleeding. Giving a helping hand to the airline industry is done all over the world,” said Naresh Goyal, chairman of Jet Airways and a founding member of the federation. “We may have to suspend operations indefinitely,” added Vijay Mallya, chairman of Kingfisher Airlines, while adding that international operations of member carriers will, however, continue. Among the various demands from the federation are: direction to oil retailers to sell aviation jet fuel cheaper and reduction in airport charges which they say have ballooned ever since private players were allowed into the field. “Aviation fuel prices are among the highest in the world,” said Baijal, adding this expenditure alone comprises 30-40 percent of an airline’s operational costs. These airlines owe nearly $500 million towards fuel to oil companies. “This is a well considered decision of private carriers,” added Baijal. He said the carriers would take whatever logistical action was needed as the result of suspension of operations like refund of money for tickets already booked. Thus far, the civil aviation ministry has ruled out any bailout package for the aviation industry, even though moves are afoot to help the national carrier tide over one of its worst crises. The opposition parties, including the Left front and the Bharatiya Janata Party (BJP) have also said that a bailout package from the government would not be desirable. These parties said the decision of private carriers was unfortunate and will put the passengers to severe inconvenience. Reacting to the federation’s decision, Kapil Kaul, chief executive officer for the Indian subcontinent with the Centre for Asia Pacific Aviation, a think tank for the industry, said this was more of a symbolic gesture. “The carriers are not in a financial position to go beyond a day,” he said, adding there was tremendous pressure on their revenues. He also said that the accumulated debt of the private carriers may also have jumped to $8 billion. Civil Aviation Minister Praful Patel had told parliament recently that private carriers had incurred losses worth $500 million during 2007-08, but ruled out any government-led bailout package for the private industry.

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