Airline biggies seek Singhs intervention to resolve crisis

While the Prime Minister gave a patient hearing to the crisis-hit industry,he is said to have refrained from giving any assurance.

One of the chief demand of the sector regarding lowering of taxes on jet fuel falls under the states domain,and consultations and repeated requests by the civil aviation ministry had borne little results. These taxes vary from 4 per cent to as high as 33 and 35 per cent,making jet fuel cost at least 50 per cent higher than most other countries.

The airline bosses later had a meeting of their own to discuss the issues in depth,the sources said. While the Indian aviation sector has been witnessing a high passenger and cargo growth rate,all airlines have suffered from a high rate of debt and losses.

The Federation of Indian Airlines (FIA),a representative body of Indian carriers,recently warned that a bad operating climate in the country might compel some domestic carriers to default in servicing their debt,bringing them to the brink of closure.

The meeting came in the wake of some airlines like Kingfisher seeking change in the aviation policy mainly to allow foreign airlines pick up stake in Indian carriers,which is not permitted at present. Other carriers like Jet Airways and IndiGo are not in favour of such a move.

However,the Industry Ministry recently moved a draft Cabinet note to allow 26 per cent FDI by foreign airlines in domestic carriers,even as the Civil Aviation Ministry wants to cap the FDI at 24 per cent.

The domestic airline industry is facing headwinds,with input costs rising and yield falling due to excess capacity in the market.