Civil aviation minister, Ajit Singh, on Wednesday, asserted that there will be no bailout for private airlines even as he exhorted state-owned Air India to become more competitive.
“The government is not in a position and will not bail out any private airlines. AI is a public sector unit, so the government has an obligation. But, AI will have to become competitive and restructure their costs as the government cannot keep on pouring money,” he said.
Asked about the demands by private airlines (especially Kingfisher Airlines) for a bailout package, he said they will have to come up with a viable business plan. “If the banks are satisfied with their plans and think they can recover their money, then they will lend money,” Singh said.
On AI, the government is already expected to pump in as much as Rs23,000cr over the next decade. While the minister admitted to “some hitch” in Air India’s restructuring plan with objections being raised by lenders, he said these objections would be resolved jointly by secretaries of civil aviation and finance.
Singh also confirmed that a committee of secretaries has permitted foreign airlines to invest in Indian carriers, up to 49% and now this proposal would be taken up by a group of ministers. As of now, foreign carriers are barred from investing in Indian airlines and some domestic carriers - especially Kingfisher Airlines - have been pushing for this policy intervention to get much needed funds.
About safety lapses by airlines due to their poor financial condition, the minister said, “There are problems. Industry has grown so fast in past few years.
There is shortage of trainee pilots, of stewardess. But as far as question of jeopardising the safety of passengers is concerned, there is no such fear. There is no compromise,
Comments: 1