India eyes relief package for struggling airlines

Ministers in New Delhi are pushing for a package of relief measures to help India’s ailing airlines, which are struggling to cope with a sharp rise in oil prices and a collapse in the rupee. The country’s domestic aviation market has been growing more quickly than any in the world for the past few years, but airline profits have dropped off in the past six months because of higher fuel prices. With Jet Airways, the country’s second-largest airline, already in significant financial difficulty, the government is pushing for measures to help control costs and make it easier to secure funding. Officials have said that there are three measures under consideration: reducing the tax on aviation fuel, reducing the tax on aircraft servicing and allowing companies to borrow more. But they added that ministers were not yet considering bailouts of individual companies such as Jet, preferring instead to see what happens during the lucrative festival season in the last three months of the year. “There are things we can do to improve the situation for carriers, but it is too early yet to be talking about bailouts for individual companies,” said one. India’s domestic aviation market has until recently been booming, with passenger numbers growing at around 25 per cent a year. But in the past year, the rising price of oil and the falling rupee have pushed up fuel costs. <br/>