Airlines in India need short-term support from the government as revenues have dried up due to the outbreak of COVID-19, Ajay Singh, chairman and managing director of SpiceJet said.
Speaking at a webinar organised by Bird Group, Singh said aviation is the most impacted industry in the world and in India, and revenues from the aviation industry have come to "zero" across the world.
“Governments throughout the world are trying to ensure that airlines don't collapse. Airlines in India need short term support from government, we are talking to them on a daily basis," Singh said.
The aviation industry witnessed another jolt today when the government announced that the ban on domestic and international travel has been extended till May 3 in line with the extension of lockdown. This development comes at the time when airlines were ready to operate some of their flights from April 15.
The unprecedented crisis has led to airlines, including SpiceJet, resort to salary cuts and minimise costs to ride through the situation. SpiceJet on March 31, had announced that it would cut the salary of its top and mid-rank employees by 10-30 percent for the month of March due to the coronavirus situation.
Singh was to take a salary cut of 30 percent for the month of March but the company had assured that all of its employees in the lowest pay grades will remain unaffected.
Today, Singh said the government needs to follow a model followed in other countries and support airlines in payment of some salaries as well.
“Government can look at helping out airlines in payment of some salaries, exemption on airport charges for a period of time, credit with interest subvention, reduction of excise duty on Aviation Turbine Fuel (ATF) for a short period of time," Singh said, adding that the country should use this crisis as an opportunity to make long pending structural reforms.
"Bringing ATF under Goods and Services Tax (GST) is a long pending request and this will make airlines cost competitive. Changes are needed in whole structure of airports, process of concession agreement. We also need to look at anomalies...we are providing Rs 60-70 per passenger to SITA…these should be looked at, infrastructure charges at airports need to be suspended," Singh added.
Other than IndiGo, SpiceJet was an aggressive international player in India over the last one year. Post the Suspension of Jet Airways, IndiGo and SpiceJet tried to capitalise on the available capacity and added international services frequently.
14/04/20 CNBC TV18
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Speaking at a webinar organised by Bird Group, Singh said aviation is the most impacted industry in the world and in India, and revenues from the aviation industry have come to "zero" across the world.
“Governments throughout the world are trying to ensure that airlines don't collapse. Airlines in India need short term support from government, we are talking to them on a daily basis," Singh said.
The aviation industry witnessed another jolt today when the government announced that the ban on domestic and international travel has been extended till May 3 in line with the extension of lockdown. This development comes at the time when airlines were ready to operate some of their flights from April 15.
The unprecedented crisis has led to airlines, including SpiceJet, resort to salary cuts and minimise costs to ride through the situation. SpiceJet on March 31, had announced that it would cut the salary of its top and mid-rank employees by 10-30 percent for the month of March due to the coronavirus situation.
Singh was to take a salary cut of 30 percent for the month of March but the company had assured that all of its employees in the lowest pay grades will remain unaffected.
Today, Singh said the government needs to follow a model followed in other countries and support airlines in payment of some salaries as well.
“Government can look at helping out airlines in payment of some salaries, exemption on airport charges for a period of time, credit with interest subvention, reduction of excise duty on Aviation Turbine Fuel (ATF) for a short period of time," Singh said, adding that the country should use this crisis as an opportunity to make long pending structural reforms.
"Bringing ATF under Goods and Services Tax (GST) is a long pending request and this will make airlines cost competitive. Changes are needed in whole structure of airports, process of concession agreement. We also need to look at anomalies...we are providing Rs 60-70 per passenger to SITA…these should be looked at, infrastructure charges at airports need to be suspended," Singh added.
Other than IndiGo, SpiceJet was an aggressive international player in India over the last one year. Post the Suspension of Jet Airways, IndiGo and SpiceJet tried to capitalise on the available capacity and added international services frequently.
14/04/20 CNBC TV18
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