Airlines to get relief package, Air India assured Rs 21 bn borrowing: Govt

The government was working on a relief package for airlines, R N Choubey, Secretary, Ministry of Civil Aviation said on Tuesday. The package will focus on reducing airlines’ cost, he added.

National carrier Air India has also been assured of Rs 21 billion from the Centre in the form of guaranteed borrowing, Chaubey said.

Reports suggest that Air India is currently in debt to the tune of Rs 500 billion, and reported a loss of Rs 57.6 billion in March last year.

India's passenger carriers are suffering from a "double whammy" of a steep rise in fuel costs and the decline in the Indian rupee value, global airlines association IATA said.

According to the International Air Transport Association (IATA), the rise in fuel costs was particularly acute for Indian carriers as it makes up 34 per cent of operating costs well above the global average of 24 per cent.

"While it is easy to find Indian passengers who want to fly, it's very difficult for airlines to make money in this market," said Alexandre de Juniac, IATA's Director General and CEO at the International Aviation Summit being held here.

"India's social and economic development needs airlines to be able to profitably accommodate growing demand. We must address infrastructure constraints that limit growth and government policies that deviate from global standards and drive up the cost of connectivity."

IATA's growth forecast for India indicates a trebling of passenger demand by 2037 when some 500 million people are expected to fly to, from or within India.