A high-powered committee, set up to examine the problems faced by the Indian aviation industry, met for the first time on Thursday and decided to tackle the problems head on by dividing them between their respective ministries.
The committee has concluded that the sector is in desperate need for help to save itself and the main problem is related to surging fuel costs. The panel, headed by Cabinet secretary KM Chandrasekhar, suggested that partner industries and ministries, including oil, would have to work out what can be done to save the aviation sector from falling into a financial sinkhole, official sources said. The panel comprises secretaries of the ministries of finance, civil aviation, revenue, petroleum and natural sas and the Planning Commission, apart from IDFC chairman Deepak Parekh and IIM Ahmedabad professor Raghuram and was set up in July, in response to concerns which the aviation industry brought to the Prime Minister?s attention.
Indian airlines have jointly suffered an estimated loss of Rs 4,000 crore last year, which is expected to double this financial year. At least 24 airlines the world over, have folded up in the past six months, according to IATA figures. The total number of passengers carried by Indian airlines in May this year fell from 41.16 lakh to 35.06 lakh in June, showing a fall of around 17%. The fall in the number of passengers for this month is only 4.21 lakh showing a drop of 12%. The committee, set up by Prime Minister Manmohan Singh, has decided that it will put together a package for the industry to ensure that the experience of 1990s, when several Indian airlines closed down, does not re-occur. It will meet again in three weeks, sources said.
The committee?s terms of reference, laid out by the Cabinet secretariat in its communication to the civil aviation ministry, include the examination and assessment of the financial difficulties faced by airline operators in India. The committee will also take into account the international scenario and practices followed by other countries and airlines. The committee has also been mandated to make appropriate short-term and long-term recommendations for the sustained growth and health of the aviation industry, a statement from the ministry of civil aviation said. The committee has been asked to submit its recommendations as soon as possible.