The government is considering giving traffic rights to private airlines on global routes to help them tide over their financial problems, Civil Aviation Minister Ajit Singh said Wednesday.
“Increasing international traffic rights can help private carriers eliminate some of their financial problems as international routes are more profitable,” he told reporters at the India Aviation 2012.
He said about 500 to 600 new international flights will be opened to private carriers this year under the bilaterals, with new destinations such as Uzbekistan, Egypt, Ethiopia and Vietnam. Bilaterals are agreements between two nations to allow international commercial air services within their territories.
Air India has only been able to use 30-35 percent of the total bilateral traffic rights available with India. "This year it will go up to 40 percent," said Ajit Singh.
He said a note on allowing private airlines to participate in foreign direct investment had been moved and the commerce ministry was looking into it.
Voicing concern over increasing jet fuel prices, he said while aviation turbine fuel (ATF) is 20 to 25 percent of the operation cost worldwide, it is 40 percent or more in India.
He said part of the problem was high taxes imposed by the states.
"We are allowing airlines to import ATF directly. This will take some time as the infrastructure for ATF at the airports is handled by oil companies. The airlines will have negotiate with the oil companies," he said.
He made it clear that the government would not bail out any private airline.
"We will bail out only Air India because it is a government concern. Even this is not going to continue indefinitely. Public exchequer can't bear bailing out Air India unless they improve proficiency and cost structure in line with aviation industry."
The minister said the ministry would move financial restructuring package for Air India before the cabinet this week. The government will infuse Rs.6,500 crore into the state carrier.
He said final permission would also be taken from the cabinet for the purchase of Boeing 787 Dreamliners.
Asked about the compensation Air India is seeking from Boeing for the delay in delivery of Dreamliners, Ajit Singh said it was under negotiation.
The first Dreamliner was to supposed to be inducted in 2008 but is now likely to happen in April or May. He said the delay had caused problems to Air India.
He said he and Prime Minister Manmohan Singh discussed the aviation sector and the course of action for its development.
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