Private airline bosses seek Manmohan's help to tide over hard times-There are structural issues that need to be resolved-Nov 27, 2011

Private airline bosses seek Manmohan's help to tide over hard times

“There are structural issues that need to be resolved if India is to have strong carriers and the same were conveyed to the PM,” said sources.

TNN | Nov 27, 2011, 01.12AM IST

NEW DELHI: The owners of India's biggest private airlines met Prime Minister Manmohan Singh on Saturday and sought much-needed concessions for the crisis-hit sector.

The main demands are learnt to have been about rationalization of sales tax on jet fuel and faster approvals for private airlines to be allowed to fly on those international routes where bilateral from the Indian side remain underutilized.

The PM is learnt to have given a patient hearing to the team of industry chiefs such as Jet's Naresh Goyal, IndiGo' Rahul Bhatia; Spice Jet CEO Neil Mills and Go Air's Jeh Wadia. Kingfisher promoter Vijay Mallya and civil aviation minister Vyalar Ravi were not present in the meeting.

However, the issue of allowing foreign direct investment by foreign airlines was not raised in the hour-long meeting due to sharp divisions within the airline industry. Jet and IndiGo are not in favour of FDI as they fear this could lead to hostile takeovers of weak Indian carriers.

Consequently, issues on which the airlines have near unanimity like high taxes on jet fuel, hefty airport charges, unused bilateral and ground handling were raised. "The PM heard us patiently and agrees that India requires strong airlines. While no firm assurance was given, he did assure that the government would look into our woes," said sources.

Private airlines pointed out that unlike Air India, they did not ask for any cash bail outs.

"There are structural issues that need to be resolved if India is to have strong carriers and the same were conveyed to the PM," said sources.

Private airlines had sought an appointment with the PM as they are facing huge losses and after Singh promised to help the sector. The PM, while reiterating private airlines need to be run efficiently, recently said: "But if they do get into difficulties, we have to find ways and means to help them get out of the process."