Cash-strapped carriers seek PM's intervention to face crisis

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Cash-strapped Indian airlines on Saturday sought Prime Minister Manmohan Singh's intervention to help them face the ‘bad operating climate’ and come out of the deep financial crisis.

Top bosses of the Indian carriers met the Prime Minister for about an hour and suggested measures like rationalising taxes and duties on jet fuel prices and other items to help the ailing industry.

The Prime Minister heard the problems being faced by the airline industry but did not give any assurance, sources said.

Those who attended the meeting with Singh included 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, the sources said.

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 domestic carriers to default in servicing their debt, bringing to them to the brink of closure.

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. Some other carriers like Jet Airways and IndiGo are not in favour of such a move.

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.