Airlines in India seek $1.5b in interest-free credit line

Airlines in India are seeking at least $1.5b as an interest-free credit line from the government, Civil Aviation Minister Hardeep Singh Puri said, as lockdowns and restrictions linked to the coronavirus pandemic hit demand for air travel. The carriers in what was until recently the world’s fastest growing aviation market are also seeking to defer loan repayments by six months, without these borrowings getting classified as “non-performing,” Puri said in a written reply in parliament. Local airlines have asked the government to include jet fuel in the South Asian nation’s goods and services tax, and abolish excise duty on aviation turbine fuel, the minister said. Indian Prime Minister Narendra Modi has yet to announce any meaningful monetary package for the aviation industry, as the government struggles with the worst economic slowdown among major nations. Indian carriers need as much as $2.5b to keep flying, according to estimates from CAPA Centre for Aviation, and one or more of the nation’s airlines are expected to fail in the absence of additional funding from the government or their owners. India was one of the most difficult places for the aviation industry even before the pandemic, with fares as little as 2 cents and some of the world’s highest fuel taxes. However, the government is engaged with aircraft lessors and financiers to ensure there is no premature withdrawal of planes, Puri said. Local traffic has slumped almost 80% to just 12m passengers in the five months to July 31, eroding airline revenues, he said. Close to 3m jobs in aviation and related industries as well as more than $11b in revenue could be lost in India this year because of the pandemic according to the IATA. <br/>