Govt offers help to airlines: Praful Patel | india | Hindustan Times
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Govt offers help to airlines: Praful Patel

The Govt can help cash- starved airlines by cutting taxes on fuel or reducing charges for landing, but would wait for an official panel to make its recommendations, says the aviation minister.

india Updated: Oct 15, 2008 15:02 IST

The Government can help cash- starved airlines by cutting taxes on fuel or reducing charges for landing, parking and route navigation, but would wait for an official panel to make its recommendations, Civil Aviation Minister Praful Patel said on Wednesday.

"Government is sensitive to the problem. At a meeting with the prime minister, I have already given an overall picture to him, after which a committee was constituted. But its recommendation will take sometime," he told reporters in Hyderabad.

Airlines, both private and state-owned that are already facing high fuel costs, are now reeling under the effects of the global financial crisis with drop in premium air traveller numbers.

"We can reduce fuel bills by cutting taxes or ask oil companies to cut base price for airline industry, landing, parking and route navigation charges could also be reduced for a small period of time," said Patel, who was in Hyderabad for the India Aviation-2008, civil aviation expo.

The airlines have sought a bailout package worth Rs 4,750 crore to tide over the crisis spawned by fuel costs and poor load factor.

"We need a consensus on all these things," Patel said, adding that he was "disappointed over the approach of some other ministries which are associated with the entire process (on reducing taxes on ATF) and also with state governments (also on reducing sales tax or VAT)."

"Many departments are not taking a positive approach. If tomorrow no plane flies on the Indian skies, who is there to answer. There is a bad patch in the industry and it needs to be resolved," he said.

Patel said that many airlines had complained to him that banks and lending institutions were not happy to lend to them.

"This will be on top of my agenda. I will meet the finance minister, bankers and ask them not to put undue pressure on airline industry, because it is infrastructure.

"They should keep some open window for the sector."

The panel appointed to look into the bailout plan for airlines has in turn constituted a sub-committee, which is looking into the finer details of the Rs 4,750 crore package sought by the industry.

The sub-committee is expected to submit its report to the panel shortly, after which a comprehensive report would be presented to the Aviation Ministry.

The crisis in the industry has already forced two of the largest players Jet Airways and Kingfisher Airlines to strike an operational alliance, prune staff strength and routes to cut costs.

Earlier inaugurating the expo, Patel said India provided a huge investment opportunity in the aviation sector, and that about 200 to $300 billion would be required in the next 10-15 years for development of aviation infrastructure.

There were about 400 old or unused airports in the country that could be brought into operation in a phased manner, he said.

Apart from regular air traffic, helicopter tourism, general and business aviation should also be exploited as they held huge potential, Patel noted.

First Published: Oct 15, 2008 14:56 IST