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'No helping any one airline, the whole sector is in crisis'

Last updated on: February 21, 2012 13:46 IST

'No helping any one airline, the whole sector is in crisis'

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Kavita Chowdhury in New Delhi

The United Progressive Alliance government has done 'all we could' to aid the country's beleaguered aviation sector, according to Civil Aviation Minister Ajit Singh.

As for the crisis emanating from the Kingfisher Airlines' flight cancellations, it is now up to the airline to utilise those measures and come up with resources, he tells Business Standard's Kavita Chowdhury in an interview. Edited excerpts:

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Image: Ajit Singh.


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'No helping any one airline, the whole sector is in crisis'

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The sudden large-scale cancellation of scheduled flights by Kingfisher Airlines over the weekend, it seems, has snowballed into a full blown crisis. . .

Everyone knows that Kingfisher has been having a financial trouble for some time now.

They have amassed huge debts, they hadn't been able to pay the airport authority, they haven't paid the oil company dues, they hadn't paid salaries for the past few months.

Even their accounts have been frozen.

We, the government, have made it clear that there will be no bailout.

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'No helping any one airline, the whole sector is in crisis'

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However, we have taken three crucial steps to help the aviation sector.

Firstly, we have allowed all airlines to directly import aviation fuel.

Next, we are working on allowing FDI up to 49 per cent in the aviation sector.

Thirdly, we have allocated traffic rights to private airlines on foreign routes.

All these measures should help airlines.

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Image: Vijay Mallya.

Tags: , FDI

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'No helping any one airline, the whole sector is in crisis'

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There is an impression that the government is going all out to help out Kingfisher. . .

It's not the question of helping any one airline the whole aviation sector is in crisis.

Only Indigo was able to pay the Airports Authority; no other airlines has managed it.

The measures we have taken will help airlines to come up with fresh business plans to persuade banks to lend them money.

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'No helping any one airline, the whole sector is in crisis'

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But shouldn't market forces be allowed to operate fully? In that process, if certain players fade away, so be it?

Yes, ultimately that will happen.

But the aviation sector is a crucial infrastructural sector.

The closure of any airline has a spiraling effect: passengers are inconvenienced, schedules are disrupted.

We (government) on our part have taken the above three steps to help them.

Now it is up to the banks to see if the business plans of the airlines are viable. But we are not going to bail them out.

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Image: Indian Parliament.
Photographs: Reuters
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There was criticism against a recent move of allowing domestic airlines to fly to more foreign destinations, initially a preserve of Air India. . .

But we realised that Air India, in any case, was not able to utilise the allocated bilaterals, as it didn't have adequate aircraft.

Even the 'dreamliners' will take time to be here.

Therefore, why should we let foreign carriers alone benefit?

Private airlines can utilise that capacity as well. In any case, we stand to benefit when the airport facilities are utilised. 

So according to you, the government has done its bit and now its up to the airlines to do the needful?

Yes.



Tags: Air India

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