NEW DELHI: As the major aviation players are unable to lose the baggage of high fuel prices, cheap tickets digging a hole in their account books, making the sector almost unviable, the government has entrusted NITI Aayog with the task of preparing a roadmap for the sector.
“The aviation sector is in trouble and this is a matter of concern. Air India is a known story and we are aware of what is happening at Jet. Soon Niti Aayog will be preparing a roadmap for the sector regarding policies,” a senior finance ministry official told TNIE.
According to the official, NITI Aayog will be coming up with roadmap by the end of September.
Meanwhile, for the immediate relief to the sector, the government is also looking at relaxing the ECB route.
“One of the immediate suggestions we have got is to relax ECB route for the sector. We are looking into the option and will decide after weighing all the pros and cons,” The official added.
State-run Air India is already reeling under the pressure huge debt of Rs.48,447.37 crore by March 2017, out of which 31087.76. After its disinvestment plan failed, the government has infused Rs.978 crore as the Maharaja is unable to pay its vendors and has delayed the salary of the staff for about six months. It had already demanded a bailout package from the Finance Ministry.
The trouble is already reported at India’s second-largest carrier Jet Airways, as it was forced to postpone its fiscal first-quarter results on Thursday after the audit committee, including three independent directors and one representative of equity partner Etihad Airways, refused to approve the accounts. Jet Airways, which is already burdened with $1.2 billion in net debt, its stock has also lost two-thirds of their value this year alone.
Jet Airways on Tuesday said its Chairman Naresh Goyal met Civil Aviation Secretary R N Choubey to discuss matters concerning the sector and the airline.
Even InterGlobe Aviation Ltd, which operates IndiGo, which is considered the most efficient airlines, reported a 97 per cent drop in its quarterly profit. IndiGo’s quarterly results were its worst in the last three years, at Rs 27.8 crore for April-June 18, mainly impacted by adverse foreign exchange, high fuel costs and a competitive fare environment.
Even the Aviation Ministry accepts that high fuel price is hurting the sector.
“Due to increase in fuel costs, airline sector not just in India but globally is facing serious challenges. All the airlines are suffering because their cost has suddenly gone up after a long lull in oil price,” Suresh Prabhu told reporters on Tuesday.