Govt plans huge bailout package for Air India
The government, is contemplating a comprehensive bailout package for state-owned national carrier, which ran up whopping losses of Rs 2,144 crore through last fiscal year.india Updated: Jul 23, 2008 22:18 IST
The government, worried over crippling finances of Air India, is contemplating a comprehensive bailout package for state-owned national carrier, which ran up whopping losses of Rs 2,144 crore through last fiscal year.
“A proposal to bail out the airline (Air India) is being prepared,” civil aviation minister Praful Patel told reporters.
Top government officials, who did not wish to be identified, said a Rs 2,300-crore dole out — comprising Rs 1,300 crore in loans and Rs 1,000 crore in equity infusion — is in the offing.
“The target for Air India is to save Rs 1,000 crore through a series of measures, including slashing and rationalisation of unviable routes by the next year. About Rs 500 to 600 crore will be saved this year,” Patel said.
The steep hike in prices of aviation turbine fuel in recent months has the airline industry the world over suffered huge financial losses. Jet fuel prices in India went up by a whopping 118 per cent in the past three years to Rs 69,097 per kilolitre in July this year from Rs 31,750 per kilolitre in July 2005.
The cumulative losses of the airline industry in India is pegged at Rs 10,000 crore by the end of the current financial year ending in March.
Patel said he is not keen on bringing in any fresh initiatives in the aviation sector during the remaining tenure of the government. “But I will go all out for rationalisation of taxes on ATF,” the minister said. “I could not pursue the issue in the last one month as the government was already under pressure.”
“I would like to find a permanent solution to the chronic problem,” Patel said about bring down jet fuel prices.
Incidentally ATF prices in the country are nearly 60-70 per cent high compared with any other nations.
He also said the Airport Economic Regulatory Authority Bill or an economic regulator will be in place before the present government demits office.