With airlines' mounting losses, FIA seeks concessions from civil aviation ministry

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

Press Trust of India November 21, 2018 13:59:52 IST
With airlines' mounting losses, FIA seeks concessions from civil aviation ministry

Mumbai: Amid domestic carriers facing "substantial losses", the Federation of Indian Airlines (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 Jet Airways and three budget airlines, IndiGo, SpiceJet, and GoAir.

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

With airlines mounting losses FIA seeks concessions from civil aviation ministry

Representational image. Reuters.

"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, IndiGo 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 16 November.

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 airlines industry 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.

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