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PM meets private airline chiefs, takes stock of aviation sector's poor financial health

November 26, 2011 - New Delhi

Top bosses of private airlines met Prime Minister Manmohan Singh on Saturday to seek the government's help for the cash-strapped aviation industry, including rationalisation of taxes on jet fuel.

Jet Airways chairman Naresh Goyal, Indigo promoter Rahul Bhatia, Spice Jet CEO Neil Mill and Go Air owner Jeh Wadia attended the nearly hour long meeting at the Prime Minister's official 7, Racecourse Road residence.

Some of the airlines have been demanding a change in the aviation policy to allow foreign airlines to pick up stake in Indian carriers.

Prior to the meeting, Civil Aviation Minister Vayalar Ravi said the losses in the airline sector was posing a "problem" and added that the Prime Minister was concerned, as it is a major institution of connectivity.

The Prime Minister had said on November 12 that the government would explore "ways and means" to help the private airlines.

Dr Singh had said that private sector airlines should be managed efficiently.

Kingfisher Chief Vijay Mallya had questioned whether it was his airline's "duty" to fly on loss-making routes.

Thousands of passengers were affected after the private airline cancelled hundreds of flights.

The industry ministry has moved a draft Cabinet note on allowing 26 per cent FDI by foreign airlines in the domestic carriers.

Reports this week said the government had decided in principle to allow foreign airlines to own up to 24 percent of Indian carriers, a move that could throw a lifeline to Kingfisher and its struggling rivals such as Jet Airways and Spice Jet.

The Centre for Asia Pacific Aviation has forecast a record 2.5 billion dollars to 3 billion dollars loss for airlines in India for the year ending March 2012, with state-run Air India alone likely to account for more than half of it.


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