Private Airlines Issue Strike Threat, Govt Refuses Bailout

With the government refusing to bailout private airlines, the Federation of Indian Airlines (FIA) – comprising of Jet Airways, Kingfisher Airlines, SpiceJet, IndiGo and GoAir – has threatened to suspend operations on August 18 if the government does not help them cut costs.

While airline managements contend that the current operating costs are no longer sustainable, Minister for Civil Aviation, Praful Patel, in a statement, sympathized with the airlines for their problems but categorically ruled out support to any move which would inconvenience the nearly one lakh passengers the private airlines carry each day.

“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,” he said.

Patel further advised the airlines to “engage in a dialogue with the government,” and cautioned that the aviation regulating body – Directorate General of Civil Aviation – would be asked to initiate strict action if the airlines did not withdraw the strike threat.

The national flag carrier Air India plans to launch additional services Aug 18 to cushion passengers from the impact of the strike, he informed.

Referring to a key demand issued by the private players, Patel iterated that tax on Aviation Turbine Fuel (ATF) was a state issue and said that the “aviation ministry has been requesting the states for the past few years to see reason.”

Apart from tax cuts on ATF, private carriers seek governmental directives asking oil retailers to sell aviation jet fuel cheaper and reduce the airport charges which have boomed since the entry of private players.

Federation of Indian Airlines (FIA) says that private airline in the country may not remain operative unless the government intervenes on their behalf and negotiates a reduction in jet fuel taxes and airport charges.

While analysts describe the strike threat as a pressure tactic, airline managements say the tax burden was unmanageable and seek the classification of ATF as a ‘declared good’ with a uniform, four per cent, tax across the country.

Aviation fuel accounts for nearly half of half of operating c

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