Patel calls for fare cuts, but airlines see no room

22 November 2008

Civil aviation minister Praful Patel has asked air carriers, including Jet Airways and Kingfisher Airlines, to cut fares in view of the support extended to the industry by the government and the downward trend in fuel prices.

Speaking at the Hindustan Times Leadership Summit, Patel said the government has a responsibility towards the people and a lack of reciprocal action by airlines following the government's support would only damage the image of the airlines in the public perception.

Jet Airways chairman, Naresh Goyal, in response to the call, said that carriers have also a responsibility to their shareholders and can act upon the call to cut prices, provided they still remain profitable. He said that carriers need to protect their bottom lines.

The aviation ministry had brokered a deal in October between oil marketing public sector units and air carriers that extended credit period and clearance of dues amounting to Rs3,000 crore to March next year.

Replying to a question, Patel said the state-owned carrier Air India, as a responsible government carrier, would respond to fuel price cut appropriately.

Patel, however, admitted the country's aviation sector has been pinned down by wrong taxation policies and ''even today we fail to acknowledge that air transport is a mode of public transport.'' The biggest reason is that not creating the right infrastructure, he added.