In an unprecedented move, the Federation of Indian Airlines (FIA) has demanded a bailout

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package from the central government and announced on Friday that they would not fly on August 18. The domestic airline representative body- FIA, also threatened that if their demands are not heard, they will go on strike indefinitely. This decision of the passenger carriers is expected to affect over one lakh passengers, who fly daily.

Addressing a press conference in Mumbai, FIA general secretary Anil Baijal said, “The idea is to highlight the urgency for the government to intervene urgently. Member airlines have accumulated losses worth a whopping $2 billion (Rs 10,000 crore) in 2008-09 and unless the government initiates action to help them overcome the crisis they will not be able to sustain operations any further.” The combined losses of all private carriers were Rs 2,444 crore in 2007-08.

Baijal further said, “All these issues have been taken up with the concerned ministries in the government of India but without any success.”

The members of the FIA, who will be participating in the 24 hour strike, are Jet Airways, Kingfisher Airlines, SpiceJet, Indigo and GoAir among others. However, country’s public carrier Air India was not part of the discussions on Friday and would not participate in the strike. “Air India will operate additional flights on August 18 so as to reduce inconvenience to the public,” Praful Patel, Union Civil Aviation Minister said in a statement.

"We may have to suspend domestic operations indefinitely," added Vijay Mallya, chairman of Kingfisher Airlines and added that international operations of member carriers will function as normal.

Jet Airways, chairman, Naresh Goyal said, “If the industry has to sustain, we need to be in business. But all are bleeding, whether it is private or public airline. All of us need help.”

FIA has requested the government to declare aviation turbine fuel as declared goods, which will then attract uniform sales tax of four per cent across the country, unlike the ad valorem taxes levied by state governments. The federation has also expressed concern over the issues like airport development charges, landing and navigation charges and property rentals, which have led to increased operation cost by 10 per cent for the airlines in last one year and ATF constitutes to around 40 per cent of the operating cost for an airline. “On the contrary the airfares have declined by 50 per cent five years ago,” Baijal said.

The airlines also want the airport developers to take them into confidence before fixing the development charges and not fix amount arbitrarily.

Patel further said that the government understands the problems faced by the airlines, but also warned that the government would not support any move that would inconvenience passengers. Tax on ATF is a state issue and the aviation ministry, has been requesting the state government to be reasonable about ATF. It is also learnt that Finance Minister Pranab Mukherjee has promised to discuss the issue with Patel.

This decision of the private airlines has come amid rumours of central government planning infuse over Rs 1,350 crore equity into the ailing Air India and further providing guarantee for the soft loan for over Rs 3,500 crore.

Ironically, the protest decision by FIA has come on a day when oil marketing companies like Indian Oil Corporation, Hindustan Petroleum Corporation Ltd and Oil India Ltd have hiked ATF prices by around Rs 600 per kilolitre effective from Saturday midnight. The price of ATF in Delhi effective from August 1 would be Rs 36,338.18 per kilolitre.

If there is no urgent intervention from the government, we will go ahead with our decision. But since it is our decision, we would refund the ticket amount to customers, Mallya said.

rupeshjanve@mydigitalfc.com