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As losses mount private carriers ask govt to resolve issues news
18 October 2011

New Delhi: With losses mounting by the day, India's private airlines have asked the government to get proactive and cut taxes on aviation fuel and also compel state-controlled Air India to raise fares. Together, private carriers in the country control 83% of the domestic passenger market.

According to the Federation of Indian Airlines (FIA), in the six months ended September alone private carriers have lost Rs3,500 crore as compared to more than Rs2,900 crore they lost in the last fiscal.

Top airline officials led by Jet Airways chairman Naresh Goyal, Kingfisher Airlines chief executive, Sanjay Aggarwal, IndiGo's president, Aditya Ghosh, SpiceJet chief executive Neil Mills and GoAir chief executive Giorgio De Roni met aviation minister Vayalar Ravi over the weekend to brief on current problems and seek state intervention.

According to industry sources, private carriers have logged a combined daily loss of Rs20 crore in the first six months of the year to 31 March and have now warned the government that further financial pressure could lead to closure of one or more airlines.

''It is feared that the results for the first six months will show a loss of Rs3,500 crore,'' said Anil Baijal, secretary general of the lobby group Federation of Indian Airlines (FIA), who also attended the meeting. ''This way the airlines may not be able to function-one or two may go down,'' he said. ''We feel it will be a serious matter for the economic climate if one or two go down.''

Jet Airways chairman Goyal has let it be known that his airline was bleeding an average of Rs5 crore a day.

The private airlines have also asked the minster to ensure Air India raises its airfare and does not sell ''below its cost''. To regain its shrinking market share, Air India has been selling tickets far below market rates in the domestic market.

''The government is subsidizing Air India which allows them to provide cheaper fares-and sustain them,'' an official said. ''The suggestion was everyone should operate on cost.''

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As losses mount private carriers ask govt to resolve issues