Govt looks at relief measures for airlines as war continues

NEW DELHI: Govt is considering relief measures for airlines on multiple fronts, with no end in sight to the US-Iran war and airlines complaining of higher operating costs, along with drop in traffic. This week it could clear the way for a Rs 5,000 crore emergency credit line guarantee scheme (ECLGS), that may provide some wind in the sails of some drowning airlines.

The aviation ministry is trying to get the Hotan route in China cleared, that will give relief to Air India on its flights to the west, bypassing Pakistan and saving the loss-making airline millions by avoiding extra fuel burn on the longer route. Additionally, efforts are on to get some relief on jet fuel excise as base price is likely to remain high.

These moves come after the 25% reduction in landing and parking charges of all the 34 major airports for three months starting April 8 and the partial relief in jet fuel price hike for domestic flights for this month, which is sought to be extended to May also. The reason: Financially strong airlines have informed govt they will be forced to cut flights if some operating cost relief is not provided, leading to fewer flights and higher fares. And, weak ones may simply shut down, leading to unemployment and poorer connectivity.

To avoid that situation as the war rages on, these are the moves in the works:

ECLGS: A Rs 5,000-crore ECLGS for airlines could be sent to the Cabinet for approval this week. A financially weak airline, for instance, has almost completely run out of funds and has not again been able to pay salaries, PF or TDS on time for some months now - a violation under the law. Continuing operations for this airline and some others in a similar state depends on getting emergency funding.

"This will be subject to a limit of Rs 1,500 crore per airline," said ministry officials. While IndiGo, the only financially stable big airline, in terms of being able to generate revenues it needs, will be eligible for this scheme, they add "it might not need the same."

Hotan routing in China to bypass Pakistan: Air India has submitted the complete plan for its wide body Airbus A350s and Boeing 787-9s to bypass Pakistan airspace. The plan involves flights to Europe, UK and the US from Delhi and Mumbai flying to Leh, then enter China and from Hotan turn left to Kyrgyzstan and then take the regular route to those places. Ditto on the way back.

This route, AI has told govt, will free India from whims of Pakistan closing airspace. Taking a longer route due to closure of Pakistan airspace for almost a year now is leading to higher fuel burn, which at current fuel price levels and a weaker rupee are causing a dent to airlines, especially AI.


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