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Business News/ News / India/  Grounded aviation industry seeks govt aid to avoid job losses
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Grounded aviation industry seeks govt aid to avoid job losses

The development comes even as several airlines, including state-run Air India, have been forced to trim salaries and perks

Airlines have been forced to trim salaries and perks. (Photo: Mint)Premium
Airlines have been forced to trim salaries and perks. (Photo: Mint)

India’s aviation industry has urged the government to take steps for financial aid, including funds infusion into airlines and airports, as covid-19 paralyses the sector.

The aviation industry needs an urgent bailout from the government, FICCI Aviation Committee chairman Anand Stanley said in a letter on Tuesday to civil aviation minister Hardeep Singh Puri. A copy of the letter has been reviewed by Mint.

The industry body has sought tax relief, deferment of payment of goods and services tax (GST) for airlines, bringing jet fuel under GST, reduction in airport charges and overflight fees, a temporary cut in excise duty on jet fuel, as well as other financial aid.

“The government may immediately provide direct cash support to Indian carriers, so that airlines can meet their fixed costs, at least for the period where loss of revenues and liquidity is directly attributable to the government’s directive to cease operation," Stanley said, referring to India suspending flights till 14 April amid a three-week nationwide lockdown to arrest the spread of covid-19.

“The government could undertake some policy measures for at least 20% contribution towards the total salary bill of employees with a gross salary of 30,000 or less per month," he said. These steps will help airline companies retain employees, despite the headwinds, he said.

The development comes even as several airlines, including state-run Air India, have been forced to trim salaries and perks. On Wednesday, GoAir chief executive officer Vinay Dube informed employees in an email that a portion of the March salary will be deferred to April. Others such as IndiGo, Vistara and SpiceJet have initiated pay cuts for sections of their staff.

India’s aviation industry is expected to post losses of $3-3.6 billion in the June quarter with airlines sharing the bulk of the hit because of the travel curbs and falling air travel demand because of covid-19, aviation consultancy Capa India said in a report last week.

Domestic carriers are forecast to post losses of about $1.75 billion next quarter, followed by airports and concessionaires with losses of between $1.5 billion and $1.75 billion, Capa India said.

“The government needs to intervene as the aviation sector is at the tip of the spear and an economically critical industry," said a senior airline official, requesting anonymity.

“Countries all over the world have announced bailout packages or announced measures to help the aviation industry," the official added.

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ABOUT THE AUTHOR
Rhik Kundu
Rhik writes about the Indian economy and its crucial indicators. He is constantly navigating corporates, decoding policies, and dabbling with everything in between.
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Published: 01 Apr 2020, 11:33 PM IST
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