Government will not and cannot bail out any private airline: Civil Aviation Minister

The Civil Aviation Minister Ajit Singh today categorically ruled out bailing out any private airline stating that it was a ‘free enterprise’ and that the airline companies had to rework their business models accordingly.

Replying to a question on the future of Kingfisher Airlines at a press conference, the Minister said, “It is private business. We do not want any airline or any business to close down. We will not ask any bank to lend money. However, we are not saying it cannot be closed. All that we are saying is that they should follow all the rules and regulations, adhere to schedules, have proper financials, etc. The DGCA will not make any compromise on safety.”

AIR INDIA BAIL OUT

As regards the bail out package for Air India, the Minister said, “Air India is a government concern. We will bail it out from the public exchequer but not permanently. Air India should work on its cost structure and improve operational efficiency.”

The restructuring package for Air India, he announced, would be placed before the Cabinet in the coming week. Some of the highpoints of the package includes converting short term loans to long term loans; government to guarantee interest payments; infusion of `6,500 crore equity. All these decisions would be taken in the coming fortnight.

DREAMLINER PURCHASE

On the delayed deliveries of Boeing Dreamliner, he said that Air India was negotiating with Boeing on the compensation. However, he expected the delivery of the first Dreamliner next month. “We are in the process of taking delivery.” The first Dreamliner was to be delivered in 2008 and due to the prolonged delay, operations of Air India had been adversely affected.

To a question on Air India losing money on international routes, Singh said with the induction of Dreamliners which were fuel efficient and high capacity aircraft, Air India could effect a turnaround on the routes.