By IANS,
New Delhi : Civil Aviation Minister Ajit Singh Tuesday discussed with Prime Minister Manmohan Singh “many issues” afflicting the airline industry.
The meeting assumes significance as the government is working on a new civil aviation policy that is said to envision a strong regulatory framework and world-class infrastructure. A cabinet decision on allowing 49 percent foreign capital by international airlines in the domestic sector is also pending.
After the meeting, Ajit Singh said he had a wide-ranging discussion with the prime minister but refused to divulge any details.
But it is understood that a major concern of the meeting was the weak financial health of the sector faced as it is with a difficult operating climate owing to spiralling jet fuel prices and a high interest rate regime.
Jet fuel now comprises about 50 percent of the total operating cost of airlines in India and domestic airlines are estimated to have lost around Rs.3,000 crore in the first six months of this fiscal.
High sales tax on jet fuel imposed by states range between three-to-33 percent which makes domestic air turbine fuel (ATF) some 50-to-60 percent higher than global average. Singh said few states were in process of reducing the levy.
He, however, came down heavily on recent strikes and threats of industrial action by unions of nearly all sections of the airline employees.
“This situation cannot be allowed to continue.”
In a separate development, Finance Minister Pranab Mukherjee denied any plans by the State Bank of India to extend fresh loans to cash-strapped Kingfisher Airlines.
He was replying in Rajya Sabha a question as to whether the SBI had initiated a proposal to bail out the airline by sanctioning fresh loan of Rs 1,500 crore.
Meanwhile, Assocham said Singh during a meeting with the industry lobby said the government was considering a separate air cargo policy as 200 freighter aircraft would be required in the next 20 years to meet the sector’s demand.