Bail out aviation sector from financial crisis

New Delhi: Bailing out the aviation sector from the financial crisis is one of the top priorities of the incoming UPA government. It may consider allowing foreign carriers to invest directly in domestic airlines to infuse fresh investments in ailing airline companies, a top civil aviation ministry who did not wish to be identified said.
The civil aviation ministry has prepared a Cabinet note on the issue and the matter has been taken up with the panel or committee of secretaries (CoS), he said. The Indian airline industry is facing one of the worst crises with combined loss of nearly Rs 10,000 crore in 2008-09. The three big carriers Air India, Kingfisher and Jet Airways are estimated to have a total debt in excess of Rs 30,000 crore on its books.
While the state-owned Air India has sought government money of about Rs 4,000 crore in the form of equity and soft loan, private carrier Kingfisher and Jet Airways are finding it difficult to raise funds from the market.
"Infusion of fresh capital in Air India and getting the civil aviation policy cleared would be the priority of the government in the next three months," the official said.
The ministry also plans to clear civil aviation policy which seeks to liberalise the current eligibility criteria for domestic carriers to fly overseas.
Other issues needs immediate attention of the new government is to push for setting up of joint venture between Air India and Airbus for maintenance, repair and overhaul (MRO) facility, he said.
20/05/09 Economic Times

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Categories: Indian Aviation- In General May 2009