Government not to bail out Indian private airlines

Civil aviation minister Praful Patel on Saturday asked private airlines withdraw their proposal to suspend operations Aug 18 and asked them come to the table for discussions rather than inconvenience passengers. "The government understands the difficulties being faced by aviation sector. However, the government does not support any move that will inconvenience the travelling public of the country," Patel said in a statement. "We advise the airlines to engage in a dialogue with the government," he said, while warning that the Directorate General of Civil Aviation, the sector's regulator, will be asked to take strict action if the airlines did not withdraw their threat. The decision to suspend operations, taken at a meeting in Mumbai of the Federation of Indian Airlines (FIA) on Friday, the representative body of private carriers in the country, has also been criticised by air travellers, who said this kind of threat should be dealt with severely.

"These people are in the service sector. They earn their bread and butter from us. How can they take such a decision that has no concern for passengers? There are ways to protest but certainly not this way," said Mohan Parthasarathy, an executive and a frequent traveller. The civil aviation minister said state-run Air India, which is not a member of the federation, will mount additional services Aug 18 so to reduce the inconvenience of passengers. "The issue of tax on aviation turbine fuel is a state issue and the aviation ministry has been requesting the states for the past few years to see reason," he said, referring to one of the demands of private carriers for a cut in jet fuel prices. "The other issues primarily relate to the slowdown in the economy, global and domestic, and the impact of high prices of aviation turbine fuel in 2008-09," the minister said.

Apart from a cut in sales tax on fuel, the private carriers have asked the government to direct oil retailers to sell aviation jet fuel cheaper and reduce the airport charges which they say have ballooned ever since private players were allowed into the field. "Aviation fuel prices in India are among the highest in the world," said Anil Baijal, secretary general of the federation, adding this alone accounted for 30-40 percent of an airline's operational costs. The private carriers owe nearly $500 million towards fuel to oil companies. Baijal said that the accumulated losses of private carriers amounted to nearly $2 billion. 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.