PM cold to airline bosses' plea for help

The prime minister, who heard the problems of the industry, was said to have made no assurances to the airlines’delegation.

The cash-strapped airlines - almost all of them having suffered losses in the latest financial quarter - suggested to Singh to initiate  measures like rationalising taxes and duties on jet fuel prices and other items to help the ailing industry. The hour long meeting was attended, besides the prime minister,  by Jet Airways chairman Naresh Goyal, Indigo promoter Rahul Bhatia, IndiGo CEO Aditya Ghosh, SpiceJet CEO Neil Mills, Kingfisher CEO Sanjay Aggarwal and Go Air owner Jeh Wadia. The airline bosses later had a meeting of their own to discuss the issues in-depth.

At their meeting with the prime minister, the team discussed key issues like proposed Foreign Direct Investment (FDI) by foreign airlines, permission for direct jet fuel imports by aviation companies and relief by state-run oil marketing companies (OMCS).
The meeting came in the wake of some airlines like Kingfisher seeking change in the aviation policy to allow foreign airlines to pick up stake in Indian carriers, which is not permitted at present. Carriers like Jet Airways and IndiGo are not in favour of such a move.

While the Indian aviation sector has been witnessing a high passenger and cargo growth rate, all airlines have suffered from a high rate of debt and losses.

The Federation of Indian Airlines (FIA), a representative body of Indian carriers, recently warned that “a bad operating climate” in the country might compel some of the domestic carriers to default in servicing their debt, bringing to them on  the brink of closure.
However, the Industry Ministry recently moved a draft Cabinet note to allow 26 per cent FDI by foreign airlines in the domestic carriers, though Civil Aviation Ministry wants to cap it at 24 per cent.

“Private airlines in the country are in dire need of funds for their operations and service upgradation to compete with other global carriers,” the note circulated by the Department of Industrial Policy and Promotion (DIPP) said.

A senior Civil Aviation Ministry official said, “We will await instructions from the Prime Minister’s Office. The Civil Aviation Ministry will take forward a formal proposal for consideration and decision.”