Praful for more capital to Air India

New Delhi: Civil Aviation Minister Praful Patel, who made a presentation on the aviation sector to the Cabinet on Thursday, said he impressed upon his colleagues the need for infusing more capital into Air India, which has an equity base of just Rs. 145 crore and has placed orders for new jets worth Rs. 50,000 crore.
He said the base price of aviation turbine fuel was much higher than that in most countries. ATF accounted for more than 40 per cent of the total operational cost of an airline in India as against 20-25 per cent globally.
The Cabinet was also apprised of the decision of the Airports Authority of India (AAI) to raise funds by issuing infrastructure bonds worth Rs. 5,000 crore. The AAI was modernising and upgrading a large number of airports, including in Kolkata and Chennai.
Elaborating on the need for reducing the burden of ATF prices, Mr. Patel said the prices of jet fuel had increased by 99.6 per cent in the past one year.
India emerged as the ninth biggest aviation market, but was “still the least penetrated:” the country accounted for 0.02 air trips per capita, compared to 0.1 in China and 2.2 in the U.S. He maintained that the aviation sector was estimated to grow at 8.5 per cent a year by 2015.
Pointing out that the average yields of the airlines suffered owing to the global downturn, Mr. Patel said the average ticket price had fallen from Rs. 6,035 in 2003 to Rs. 3,956 in 2008, while the variable costs like that of ATF kept rising.
14/08/09 Vinay Kumar/The Hindu

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Categories: Indian Aviation- In General Aug 2009, NACIL Aug 2009