New Delhi: The ministry of civil aviation might ask the finance ministry for infrastructure status to the airline sector, battling high operating costs.
“We are looking at writing (for this) to the finance ministry. This would help airlines raise much required capital for sustaining operations,” said a senior ministry official, who did not wish to be identified. “They could issue tax-free bonds or opt for external commercial borrowing at low interest rates.”
According to the Centre for Asia Pacific Aviation (Capa), Indian airlines are set to lose a total of $1.3-1.4 billion this financial year, as compared $1.7 billion in 2013-14. In the past seven years, accumulated losses have been $10.6 billion.
At the end of March 2014, the airlines had a combined $585 million (Rs 3,250 crore) of cash on hand, the equivalent of less than three weeks’ revenue, Capa said. IndiGo is the only airline to have maintained a steady profit and the others need a total of $1.6 billion in funding this year to sustain their business models.
A close look at the financial data filed with the stock exchanges and the ministry of corporate affairs show for the year ended March 2014, the top five domestic airlines reported a combined loss of Rs 9,738 crore, a rise of 85 per cent from the Rs 5,276 crore the previous year.
08/12/14 Sharmistha Mukherjee/Business Standard
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“We are looking at writing (for this) to the finance ministry. This would help airlines raise much required capital for sustaining operations,” said a senior ministry official, who did not wish to be identified. “They could issue tax-free bonds or opt for external commercial borrowing at low interest rates.”
According to the Centre for Asia Pacific Aviation (Capa), Indian airlines are set to lose a total of $1.3-1.4 billion this financial year, as compared $1.7 billion in 2013-14. In the past seven years, accumulated losses have been $10.6 billion.
At the end of March 2014, the airlines had a combined $585 million (Rs 3,250 crore) of cash on hand, the equivalent of less than three weeks’ revenue, Capa said. IndiGo is the only airline to have maintained a steady profit and the others need a total of $1.6 billion in funding this year to sustain their business models.
A close look at the financial data filed with the stock exchanges and the ministry of corporate affairs show for the year ended March 2014, the top five domestic airlines reported a combined loss of Rs 9,738 crore, a rise of 85 per cent from the Rs 5,276 crore the previous year.
08/12/14 Sharmistha Mukherjee/Business Standard
