Indian airlines to suffer massive loss of Rs 10,000 cr

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Kingfisher Airline
New Delhi, Nov 15: The aviation sector in India has been facing a massive loss from last few months due to rising cost of aviation turbine fuel. The country's biggest carrier, Air India accumulated losses of Rs 13,500 crore and country's second largest private sector airlines Kingfisher accumulated losses of over Rs 4,000 crore.

According to Aviation regulator Directorate General of Civil Aviation (DGCA), Indigo Airlines is the only profit making airlines with an yearly profit of Rs 650 crore.

Meanwhile, Centre for Asia pacific claimed that the Indian airlines will lose over Rs 10,000 crore with majority of the losses likely to be faced by Air India which is to the tune of Rs 8000 crore.

Earlier, Kingfisher airlines had asked for a bail out from banks to settle their financial crisis. Meanwhile, lenders led by the State Bank of India said that they are not in a position to help airlines and claimed that cash-stapped airlines did not fufill all its commitments it had undertaken when a debt restructuring was done in last December.

Managing Director, SBI, Hemant Contractor said, "We have asked Kingfisher to raise some fresh funds if the bank is to at all consider their request for restricting, we want to see more funds coming from the company itself."

The main reason for the turbulence in the airlines sector is rising costs, price of aviation turbine fuel which alone contributes to over 50 percent of an airlines' operational cost that has doubled in the last three years.

Meanwhile, full service carriers like Jet Airways, Kingfisher Airlines and Air India claimed that cost of aviation fuel is 70 percent more in certain states in compared to other countries. Now, the big question is - will the government help these loss making airlines to come out from their trouble?

OneIndia News

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