* What’s the way out?

Broadly speaking, there are three options. First, the government can consider reducing the burden of high aviation turbine fuel prices by lowering taxes on it. This is different from a cash bailout for stricken firms, which is highly avoidable, but which is what airline bosses are clamouring for. Second, airlines must restructure their organisation and operations and remove excess flab from their systems. Plenty of excess was committed (too much staff, too many planes, too many routes) during the boom of the last few years. Any government bailout will prevent this from happening. Airlines, though, must be careful to follow due procedure in restructuring. It would help if senior management also took the brunt of pay cuts and lay-offs along with more junior employees. The third option is the one which would be the least appealing to the private promoters of major airlines: to dilute their equity stakes to raise cash to ride over the difficult times. Promoters control 80 per cent of Jet Airways and 75 per cent of Kingfisher. So there is room for dilution of equity. The price will not be the best in these economic conditions, but entrepreneurs must take some blows in a well-functioning capitalist system.