The airline industry’s grim projection of Rs 8,000 crore in losses this year has prompted the civil aviation ministry to take serious note of the issue. In a letter to Prime Minister Manmohan Singh requesting to meet him on the matter, civil aviation minister Praful Patel has said that urgent measures were needed to “save the sector from sickness.” The minister is scheduled to discuss the issue with the PM on June 11.

“Indian aviation has been growing for 20-25 per cent every year for the last few years¿The growth story is now at crossroads. One of the main factors responsible for this is the high cost of ATF which unlike some other hydrocarbons, is not subsidised. The airlines have so far been attempting to absorb a major part of ATF price increase. This is impacting the financial health of the industry,” Patel said in his letter, a copy of which is with The Indian Express.

Patel says that the domestic aviation industry incurred losses of Rs 4,000 crore in 2007-08, which could be much higher during the current fiscal due to rising jet-fuel prices. Civil aviation secretary Ashok Chawla today said that the losses could go up to Rs 8,000 crore or roughly $2 billion in the current year, if ATF prices continue to rise.

The unprecedented rise in ATF, which has been hiked four times in the last year, has become a serious cause of concern in the ministry. “Given the current trend, it is only a matter of time before this dynamic sector becomes one of the unhealthy sectors of the economy. More than airlines, these are fundamental issues which concern people’s lives, their jobs and vital issues of connectivity in a large country,” the minister has written, adding that urgent ways and means need to be adopted to save the sector from decay.

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