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No bailout for private airlines, says government

IANS  New Delhi, August 03, 2009
First Published: 12:59 IST(3/8/2009) | Last Updated: 13:02 IST(3/8/2009)

A day after private airlines called off their Aug 18 strike, Civil Aviation Minister Praful Patel on Monday ruled out any kind of bailout for them or for the state-owned carrier Air India.


"There is no question of a financial bailout for private airlines. We are not even bailing out Air India, which is owned by the government," Patel told reporters here.

"But we will try to help them (the carriers), in every possible way as it is an important sector," the minister stated, emphasising that the government understood the problems faced by the aviation industry.

Faced with stern action by the government and all-round resentment and anguish expressed by air travellers, private carriers late on Sunday spiked their proposal to suspend domestic operations from Aug 18.

These airlines had earlier issued a threat that they would also stop flying next month if a bailout package was not announced by the government to help them tide over the ongoing financial crisis, which they claim has escalated their collective losses to over $2 billion.

Among the various demands, the carriers cuts in sales tax on aviation fuel, and on airport charges, which they say have ballooned since they started operations.

Apart from their accumulated losses of over $2 billion, the private carriers owe nearly $500 million as fuel dues to oil companies.

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