All Indian Private Airlines to go on strike on Aug 18th, ultimatum to Govt

[ajay_ijn]

i was just watching news in TV. Private airlines say they are in dire situation, they cannot pay high fuel prices (one of highest in the world), airport fees and also face fall in number of tourists.

So they want govt to bailout by reducing taxes, they are not going to operate on domestic routes on Aug 18th but international will be ok.

what should Govt do?

till now Govt is grappling with Air India which demanded 20,000 Crore for bailout. but almost all airlines are threatening govt with indefinite strike if they are not bailed out.

with an already large fiscal deficit, this is not a good news for Govt. after taking up so much of privatization like allowing private airlines, privatizing airport construction, operation etc Govt is yet again faced with the problem of bailing them in difficult times.

 

[Yusuf]

Blackmail this.

 

[NSG_Blackcats]

Govt. must take serious action against private airlines.

 

[duhastmish]

I dont my govt to help - some rpivate firm from my tax, i didnt give my tax to help them expend and so they can make more money from me.

Butthe problem is - Air india- why did govt - give somany perk to them ????? they have worst service worst work ethics and bad officials .thats the reson for these airliners to raise the voice. and yeh why do private airlines have to pay higest fuel price in the world ?

 

[Yusuf]

The private airlines always crib about the high tax on fuel. As if they are shelling it out of their pocket. They have been charging fuel surcharge all this while and even today the fuel surcharge is what it was when crude was at 147.

The airlines are in a mess because of unsound and rash business decisions and now they want taxpayers money to bail them out. Who asked them to go on a buying spree? Who asked Jet to take over Sahara? or Kinfisher take over Deccan? and then order all the boeings and airbuses at the cost of millions?

The government should not give into any blackmail.

 

[duhastmish]

yusuf i secodn that totally bro , but the thing is - we should take some serious steps regarding air india too - thats yours and my tax money going in to their mistakes too.

but comign back to - private airline - they always have the option to hike the price and reform their business module. but in the end - we can only hope govt wont bow down to their blackmail but we all know what govt. always end up doing under corporate pressure.

 

[Yusuf]

We have a PM with a sound economic head. there will be no free lunches im sure and the Airlines will be forced to back down. ESMA can be enforced. Dont fall in line, cancel their license and let their planes rot.

Regarding Air India, its more to do with it being a government operate carrier more than anything else. Huge unwanted employees. They might have 3 people for one job. But then it cant fire them for obvious reasons. The employees wont let it be privatized for the very same reason. It is being operated just like how the railways was. Wonder if Lalu can be made Civil aviation minister? Im sure he would come back with a profit.

 

[ajay_ijn]

i doubt private airlines can do much if debt is too high, if they hiked prices, no. of passengers will fall further, revenues will fall and so will profit to a position where may not be able to pay back their installments. Banks are refusing to give more debt, Even oil companies n airports are not ready to defer payments.

one option is selling aircraft or leasing them to other foreign airlines. but considering global slowdown, nobody might be buying or leasing new planes.

last option is go the GM way and may be further consolidation or govt buying minority stake from airlines.

without doubt, aviation has been the worst performing sector in India in the last one year.

one would think Software would have suffered severely but even now they are trying to increase profits. The best performing sector for me is PSU banks.

 

[EnlightenedMonk]

The government can possibly bail them out of trouble, but they should ask for stakes in their companies and shares of their profits... I think that would be just, fair and logical...

 

[EnlightenedMonk]

I agree with Yusuf totally on the issue of rash and hasty business decisions... Basically they bit off more than they could chew...

 

[duhastmish]

We have a PM with a sound economic head. there will be no free lunches im sure and the Airlines will be forced to back down. ESMA can be enforced. Dont fall in line, cancel their license and let their planes rot.

Regarding Air India, its more to do with it being a government operate carrier more than anything else. Huge unwanted employees. They might have 3 people for one job. But then it cant fire them for obvious reasons. The employees wont let it be privatized for the very same reason. It is being operated just like how the railways was. Wonder if Lalu can be made Civil aviation minister? Im sure he would come back with a profit.

lmao - garib -hawa hawai ( garib rath train) loool we will end up standing for extra seat- there will be a sleeping birth on top - emergency booking window tix. and most airliner will go via route of - patna

loool but yeh we need a change despratly - and i doubt govt can give us that change - it has to be privatized just like whats going on with Delhi airports .

 

[Yusuf]

Ajay, who would buy shares of a losing company? The problem is that the airlines made some bad choices when there was a boom. They forgot about the rainy days. Over capacity is the problem. And who the hell asked them to dole out Re 1 seats, free seats etc? Thats with the low cost carriers. But the others were charging their own rates and were going at 75% occupancy and more as they used to claim.
The problem is of the management and bad business decisions. They cant blame the government.

 

[NSG_Blackcats]

When PM said that Indian CEO are getting hefty pay packages, the industry people said Govt. should not interfere in companies where it don't have a stake.
When everything goes well these private companies don't want any intervention, but when anything goes wrong they want Govt. to bail them out. Regarding Indian Airlines and Air India Govt. should sell them. Their work culture is pathetic.

 

[ajay_ijn]

The government can possibly bail them out of trouble, but they should ask for stakes in their companies and shares of their profits... I think that would be just, fair and logical...

the question is what if they are again trouble then it would be waste of money by Govt which inturn is waste of tax payers money. its like the aid US & China provides to Pakistan, even after providing so much aid, they continue to more ask few years later citing all kinds of problems.


how about bankruptcy, selling off assets and consolidating entire industry into one or two entities and reselling them to other companies.

 

[Yusuf]

Times are so bad that they will not even find any buyers. If at all they do, it will be for peanuts. Airlines all over the world have gone bust. There is no cheer in that industry.

But lets see here what can be done. Reduce sales tax as they demand. In turn they slash fuel surcharge. That will attract passengers and take care of capacity issues. Reduce airport charge for using the infrastructure. That is over and above the Rs 220 tax charged by the government i think.
What more guys?

 

[ajay_ijn]

Reduce airport charge for using the infrastructure.

that may not happen because airport operators might then strike. fees charged to airlines and travellers is their main revenue.

 

[Yusuf]

But if the airlines go bust, they will lose revenue anyways and more of it. Some compromise can be come to.

 

[Yusuf]

Government not to bailout private airlines

NEW DELHI: Civil Aviation Minister Praful Patel on Sturday said that the government would not bailout private airlines. Private airlines ganged up and decided to suspend operations on August 18 if the government did not help them cut costs

Patel advised the private carriers to withdraw their strike call on August 18. He stated, "Passengers interest would be safeguarded and DGCA would take action if needed."

Air India will increase the number of flights to reduce inconvenience to passengers, Mr Patel said. It is not known if Paramount Airways will join its private sector peers in the strike.

The minister said that the ATF tax was an issue even before the private carriers started operations. Painting a desperate picture of their situation, industry lobby body Federation of Indian Airlines (FIA) said unless the government helps them by lowering taxes on jet fuel and bringing down airport charges, their survival is in doubt.

But the strike threat by Jet Airways, Kingfisher Airlines, SpiceJet, IndiGo and GoAir, which between them carry about one lakh passengers daily, was interpreted as a pressure tactic by a senior official in the civil aviation ministry.

Government not to bailout private airlines - India Business - Business - NEWS - The Times of India