Friday, January 06, 2012

Ajit Singh promises not to let any airline wind up due to financial difficulties

New Delhi: Civil Aviation Minister Ajit Singh has promised to stand by the struggling aviation sector and not let any airline wind up due to financial difficulties or safety concerns, raising hopes of a safe landing after months of turbulence for the country's loss-making carriers.
Most domestic airlines have registered huge losses in the first half of the current financial year, and industry association Assocham has estimated that the sector's total losses for the year could be as high as Rs 15,000 crore. The cumulative debt of the industry has risen to Rs 70,000 crore, raising concerns about loan repayment defaults.
To compound matters, the Directorate General of Civil Aviation (DGCA) has in a surveillance report concluded that the financial problems of airlines were adversely impacting their safety standards.
The DGCA study is reported to have found that a reasonable case exists for the withdrawal of Kingfisher Airlines' licence as its 'financial stress is likely to impinge on safety'. It has also said a 'prima facie' case exists for restricting the operations of Air India Express due to safety issues, while finding issues with other airlines.
06/01/12 Devesh Kumar & Anindya Upadhyay/Economic Times
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