India’s Aviation Minister requests fare cuts
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Indian airlines should cut fares now that oil prices have dropped and the government has scrapped a levy on aviation fuel, according to the country’s Aviation Minister, Praful Patel.
Bloomberg reported the Minister making the request at the Hindustan Times Leadership Summit in New Delhi on Saturday, quoting Patel as saying that airlines would lose both public and government support if the savings were not passed on to the consumer.
“The government is trying to help airlines tide over difficult times,’ Patel was reported as telling the Summit. “With fuel prices dropping, you must match it with the perception that fares are coming down, otherwise public sympathy, government sympathy will wane.”
Indian carriers have had a torrid time of late, with both Jet Airways and Air India announcing large scale redundancies, and Jet having merged with rival Kingfisher as both operators struggled with mounting losses. Carriers in India may incur a combined loss of US$2 billion this year on rising costs and slowing demand for air travel, Bloomberg cites CAPA forecasts as showing.
Patel ruled out any bailout package for airlines, also said that the government would inject INR12 billion (US$240 million) into Air India, the state-owned carrier. He added that aviation infrastructure was a key constraint for airlines and that he expects six hubs – New Delhi, Mumbai, Bengaluru, Hyderabad, Kolkata and Chennai – to develop in the future.
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