MoCA for fortnightly revision of ATF price, 30-day credit to clear fuel bill

Tweaks needed, not bailout package for airlines facing COVID-19 heat: Civil Aviation Minister

Updated - March 15, 2020 08:31 am IST

Published - March 15, 2020 12:56 am IST - HYDERABAD

Union Civil Aviation Minister Hardeep Singh Puri addressing the news conference during third day of Wings India 2020 international exhibition at Begumpet Airport in Hyderabad on 14 March, 2020

Union Civil Aviation Minister Hardeep Singh Puri addressing the news conference during third day of Wings India 2020 international exhibition at Begumpet Airport in Hyderabad on 14 March, 2020

Union Civil Aviation Minister Hardeep Singh Puri on Saturday said tweaks, especially revision of ATF prices on a fortnightly basis and 30-day credit to clear the fuel bill, and not bailout packages, are needed for domestic airlines in the face of fall in travel demand.

“Yes, there are challenges, 10-15% drop in domestic air travel demand. At the same time, crude oil prices have dropped from $70 a barrel to $27,” he told the media, when asked whether a bailout package for airlines was under consideration in the wake of challenges resulting from COVID-19 outbreak.

Ruling out the bailout package, the Minister suggested that instead, the airlines should approach oil companies to provide them credit for 30 days and adjust prices of aviation turbine fuel every 15 days.

“Every time there is a challenge, you do not come to the government for a bailout,” he said, adding that falling crude oil prices would obviously benefit the sector.

Ministry of Civil Aviation (MoCA) has already recommended to the Petroleum Ministry so that the full benefit of drop is available to the airline operators, he said.

Bringing ATF under the Goods and Services Tax (GST) regime is another request of the airlines that the Ministry had recommended to the Finance Ministry.

The Minister, who was at Wings India 2020 event, said that all the stakeholders, be it airlines or airport operators, were more or less on the same page after the challenge that COVID-19 has posed, and has provided India an opportunity to emerge from that even stronger.

To queries on Air India, he said that with 120 planes, flying to 50 international routes and 80 domestic routes, and competent staff, it is a first-rate airline. The government has decided to divest Air India for a number of reasons, including the airlines’ accumulated debt. “The privatisation process is in a fairly advanced stage. We have issued a preliminary information memorandum, 600 queries have come in and we are going to respond to all of them,” he said, adding that the deadline for bids had been extended.

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