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Amid airlines' mounting losses, FIA seeks concessions from civil aviation

Airlines are facing challenging times and substantial losses in the domestic environment

Press Trust of India  |  Mumbai 

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Amid domestic carriers facing "substantial losses", the (FIA) has sought concessions from the civil aviation ministry, including additional time to pay oil companies and airport operators.

The FIA represents full-service carrier and three budget airlines, IndiGo, SpiceJet, and

In a letter to the ministry, the grouping said there is a "considerable cash flow mismatch between costs and revenues earned" by the airlines.

"Most of the members (Jet Airways, GoAir, IndiGo, SpiceJet) have bridged the deficit partly through incremental borrowings and partly by stretching operational payment obligations," it said.

Airlines are battling tough business conditions amid rising fuel prices, rupee depreciation and intense competition.

The three listed carriers, Jet Airways, and SpiceJet, have posted losses in the latest September quarter.

Member airlines be assisted with an "additional one-month unsecured credit" with respect to jet fuel and airport charges to tide over tough times, the FIA said in the letter dated November 16.

While noting that the member airlines would make staggered payments over the next few months, the FIA has also requested the ministry to consider the possibility of waiving off applicable late payment penalties/ interest during the extended credit period.

Among others, the has been pitching for bringing aviation fuel under the Goods and Services Tax (GST) regime.

"As you are aware airline operations is an extremely competitive business, this competition and the resultant aggressive pricing have resulted in low yields restricting fares from rising commensurate with rising input costs," FIA said.

"Airlines are therefore, facing challenging times and substantial losses in the domestic environment," it added.

First Published: Tue, November 20 2018. 20:30 IST
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