Oil industry will try to help loss-hit airlines

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ENS Economic Bureau Posted: Aug 16, 2008 at 0102 hrs IST

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New Delhi, August 15 : A high-powered committee set up by the Prime Minister to examine issues plaguing the beleaguered airline industry has noted that the sector is in crucial need of help to save it from surging fuel costs.

Headed by cabinet secretary K M Chandrasekhar, the committee has suggested that partner industries, including oil, would try to work out measures that could be taken to save the sector from spiralling into financial

crisis, sources in the civil aviation ministry said. The committee would then put together a package for the industry to ensure that a repeat of the 1990s experience, which saw many airlines folding up, does not recur.

The panel will meet again in three weeks to take any proposed package forward.

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The panel consists of secretaries of the ministries of finance, civil aviation, revenue, petroleum and natural gas as well as members of the Planning Commission, IDFC chairman Deepak Parekh and IIM Ahmedabad professor Raghuram. The committee was set up in July after a delegation of airline top honchos led by civil aviation minister Praful Patel met Prime Minister Manmohan Singh to highlight concerns of the industry.

Indian carriers have jointly suffered losses of over Rs 4,000 crore last year- a figure that is likely to more than double this fiscal.

At least 26 airlines world over have gone belly-up in the past six months, as per latest IATA numbers.

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