Airlines risk extinction as India refuses to rescue billionaires

With two-cent airfares, high fuel costs and taxes, India’s aviation market already was one of the toughest around. The coronavirus pandemic could be the final straw for some of the country’s airlines. Indian carriers need as much as $2.5b to keep flying, CAPA Centre for Aviation in Sydney says, and that may only last to the end of this year if they’re lucky. Airlines suffered a total collapse in demand from March 25 to late May as India banned commercial passenger flights as part of its virus lockdown. Prime Minister Narendra Modi’s administration, facing a widening fiscal deficit, hasn’t doled out funds to individual industries or airlines backed by private businesses and, in some cases, billionaires. The country’s airlines need significant investment or one or more will fail, said Satyendra Pandey, an independent consultant and former head of strategy at Go Airlines India. “Airlines with weak balance sheets and inadequate collateral have survived by withholding payments to suppliers for two months and counting,” Pandey said. The Indian aviation market was challenging enough before the pandemic as crushing fare wars and high costs took their toll. In addition to Indian states imposing levies of as much as 30% on jet fuel, a weakening rupee adds to the pain. The currency has fallen nearly 10% against the dollar over the past year, the weakest in Asia, which hurts Indian airlines as their costs are mostly dollar-denominated. Story has more.<br/>