Taking their woes to Prime Minister Manmohan Singh, top bosses of India's airlines on Saturday sought his intervention to help them tide over the “bad operating climate” that has pushed all carriers into a deep financial crisis.
Dr. Singh gave them a “patient hearing” during the hour-long, high level meeting here and said the government would discuss their “legitimate grievances” to find ways and means of helping the ailing civil aviation sector, particularly airlines, come out of the crisis. Official sources, however, said Dr. Singh did not give the airlines any assurance.
A senior Civil Aviation Ministry official said: “We will await instructions from the Prime Minister's Office.”
Those who attended the meeting included Jet Airways chairman Naresh Goyal, IndiGo promoter and CEO Rahul Bhatia and Aditya Ghosh, SpiceJet CEO Neil Mills, Kingfisher CEO Sanjay Aggarwal, Go Air owner Jeh Wadia and top officials from the GMR group, which has constructed new airports in Delhi and Hyderabad on the public-private partnership model.
Principal Secretary to the Prime Minister Pulok Chatterjee and other senior government officials were present.
Recently, the Federation of Indian Airlines (FIA), a representative body, warned that a “bad operating climate” might compel some domestic carriers to default on servicing their debt, bringing them to the brink of closure.
While the Indian civil aviation sector has been witnessing a high passenger and cargo growth rate, all airlines are burdened with a high rate of debt and have reported substantial losses.
Saturday's meeting came at a time when the Indian carriers, according to an FIA estimate, are likely to suffer a collective loss of Rs. 3,500 crore in the first six months of this financial year.
During the quarter ended September 30, Jet Airways posted a loss of Rs. 713 crore, while Vijay Mallya-owned Kingfisher's loss was put at Rs. 469 crore.
Ahead of the meeting, on Friday, Civil Aviation Minister Vayalar Ravi said the sector's huge losses were posing a “problem.” He said Dr. Singh was concerned as it was the major institution of connectivity, supporting the country's development.
Keywords: aviation industry, Prime Minister Manmohan Singh, Union Civil Aviation Minister Vayalar Ravi, Kingfisher
Real problem of this sector is underpricing by Air India since it can afford do to so as it knows it will never shut down. As a result other airlines have to match the prices and are thus running in losses. Government should exit airline business. At the very least it should level the playing field by not bailing out Air India as well.
This is a typical case of closing the door when the horses has fled.
When the international developments led toa heavy growth, Indian gove , in its wisdom, thought that the Indian airtravel is insulated and they can make it on their own.
Can any obe compute what is the loss in the inflow , had the Indian gove agreed for direct investment by foreign airlines which would have brought a win win situation to all.
We talk of lineralisation in swwt word but nver follow an intelligent/ critical analysis of the segment/ business and everyone believes that one size can fit all.
If the infrasturcure like airlines are not salvaged outgoes tourisum which will be a hige foreign exchange earner, if we operate correctly.
Expensive airtickets, hotel rates and lack of develoment skills in budget hotels can only lead to a very unpleasant development in future.
It happens in any sector when way too many players jump into the same market some of them make losses. Be the first or the smartest. I specifically had worst experience with India's #1 and # 2 pvt carriers but always had very good treatment by Air India. Government or the people did not ask these guys to start an airline or invest in this business so the governemtn should not bail them out. Government is not bailing out the farmer who loaned 1 lakh Rs from the bank. So why the Big companies who make thousands of crores?.
The only 'bad climate' these carriers claim is increasing jet fuel prices. They can easily adjust it to the air ticket prices, they are not fixed. Before giving any privilege to them govt must understand whether it is the 'bad climate' or their decisions that have taken these carriers to loss.
Please Email the Editor