Private carrier to suspend domestic operations on Aug 18

In an unprecedented protest action, eight major private airlines, which carry over one lakh passengers a day, today decided not to operate domestic flights on Aug 18 demanding immediate bailout and threatened to suspend their services indefinitely if the government does not intervene urgently.

"With a great sense of disappointment, private member airlines are compelled not to continue their operations in the circumstances. Therefore they have decided not to operate their nationwide services on Aug 18.

"The idea is to highlight the urgency for government to intervene urgently," the Federation of Indian Airlines (FIA) said today after a meeting. However, state-run Air India, which is also a member of the FIA, has decided not to join the "boycott".

Flanked by Kingfisher Chairman Vijay Mallya and Jet Airways Chairman Naresh Goyal, FIA Secretary General Anil Baijal, told a press conference that "if adequate response is not received, member airlines will be compelled to suspend their services for an indefinite period."

Ironically, their protest decision came on a day when oil marketing companies hiked aviation turbine fuel (ATF) prices by Rs 620 per kilolitre effective from midnight tonight.

Reacting to the decision, Finance Minister Pranab Mukherjee promised to talk to Civil Aviation Minister Praful Patel on the issue.

Mallya said if the government listened to the pleadings the private airlines have been making "well and good". "If not, all private airlines may have to suspend their operations indefinitely".

"If the industry has to sustain, we need to be in business. But all of us bleeding, whether it is private or public sector. All of us need help," Goyal said.

The combined losses of all private carriers was Rs 2,444 crore in 2007-08 and the FIA said the total losses expected to be incurred by the aviation industry in 2008-09 is RS 10,000 crore.

The FIA said it was not serving an ultimatum to the government but was only seeking its help to overcome the crisis. While Mallya said "you can use any word", Goyal said "ultimatum is not the correct word".

It said at the meeting today member airlines were extremely concreted about the financial difficulties faced by the industry.

Not only the ATF prices have increased manifold in the last one year and the high incidence of state levied taxes ad-valorem have increased cost to an unsustainable level, the FIA said.

In addition, the association said, the economic meltdown has impacted the passenger traffic adversely to a large extent further compounded by the drop in tourist arrivals following the Mumbai terror attacks.

The FIA said while the industry was grappling with the situation other operating costs levied by airport operators and property rentals have increased the cost further.

"All the issues have been taken up with the concerned ministries in the government of India but without any success," the association said.

The critical situation was discussed threadbare in the meeting today and member airlines felt that without meaningful relief being provided by government and its agencies may not be able to continue with the operations, the FIA said.

"The airline industry realises its role in the life of the nation but in view of the indifference shown of the government, they may not be able to continue with their operations.

"However, they have continued to operate their services so as not to cause any inconvenience to the industry, trade and the daily needs of the travelling public. In addition, despite a heavy increase in costs, average airfares have come down by as much as 50 per cent as compared to five years ago," the association said.