Wednesday, April 01, 2020

Many airline companies on the brink of bankruptcy, need govt support: FICCI writes to Sitharaman, Puri

As cash reserves of aviation sector companies are "running down quickly" as planes are grounded amid the coronavirus pandemic, industry body FICCI on Wednesday recommended several measures to Finance Minister Nirmala Sitharaman and Civil Aviation Minister Hardeep Singh Puri to help the firms.
FICCI stated in its letter that the government needs to give appropriate directions to the Reserve Bank of India to ensure that the operation of existing "stand-by letters of credit, other foreign guarantees and bank guarantees etc. issued by Indian airlines operators or their banks" are suspended with immediate eect for a period of 90 days.
In its letter to both the ministers, the industry body stated that interests, penalties, delayed charges and accruals to airport operators should be waived for the airlines, and subsequently, airport operators could be adequately supported by the government to make up for the gap.
"One of the major challenges faced by the aviation industry is that cash reserves are running down quickly as fleets are grounded and flights are not operational in the past few days. Many airline companies are almost at the brink of bankruptcy," stated the letter written by Anand Stanley, Chairman, FICCI Aviation Committee.
01/04/20 PTI/Deccan Herald
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