Airlines have sought $1.5 bn interest-free credit line: Puri1 min read . Updated: 16 Sep 2020, 05:41 PM IST
The covid-19 pandemic has hit the airlines hard as travel demand remained muted after domestic operations were allowed to resume in May after two months of grounding
NEW DELHI : Cash-strapped Indian carriers have asked the government to set up an interest-free line of credit of at least $1.5 billion for the aviation sector, civil aviation minister Hardeep Singh Puri said on Wednesday.
He said the airlines have also sought a six-month deferment of their loan repayments by banks and financial institutions, while not treating it as bad loans. Puri was responding to queries from Trinamool Congress member of Parliament Derek O’Brien in the Rajya Sabha.
Airlines have also asked the government to bring jet fuel under the ambit of the Goods and Services Tax (GST), removing the current 11% excise duty on jet fuel, facilitating of additional unsecured credit for 60 days on jet fuel purchases from oil marketing companies and deferment of tax and other statutory dues for a period of six months, the minister said in a written reply.
Airlines have also asked for the government’s help to facilitate negotiations with aircraft lessors to persuade them to ease leasing terms, Puri added.
The coronavirus pandemic has hit the aviation industry hard as travel demand continued to stay muted after domestic flights were allowed to resume in May after a two-month suspension. Indian airlines are expected to report consolidated losses of $6-6.5 billion this fiscal and an estimated $4.5-5 billion of funding will be required to overcome the covid-19 crisis, aviation consultancy firm Capa India said in a recent report.
Puri in his response that airline revenues have plunged to ₹3,651 crore in the June quarter of 2020 from ₹25,517 crore in the same period last year. Airport operators also saw their revenues decline to ₹894 crore in the June quarter of 2020 from ₹5,745 crore a year earlier.
The minister said the government has taken several steps to support the aviation sector which includes opening up of international flights under ‘air bubbles’—a temporary arrangement to resume international passenger flights with select nations, promoting private investments in existing and new airports via public-private partnership, and engaging with foreign aircraft lessors and financiers to ensure that there are no premature withdrawals of leased aircraft from Indian carriers.