Turbulent times for aviation sector is now turning into a face off between the industry and government. A day after private airlines threatened to suspend operations on August 18 the government is talking tough.
The Director General of Civil Aviation (DGCA) on Saturday made it clear that those airlines which cancelled flights on August 18 would have to refund passengers immediately for tickets paid for in cash.
Civil Aviation Minister Praful Patel issued a statement saying, "The government reiterates its advice to private airlines against suspending operations for that day. The government can't be expected to help private airlines financially. The tax on ATF has been an issue since much before many of the present airlines came into existence. If required, the DGCA will take appropriate action under its regulatory powers to protect passenger interest. Air India will stand up to its national responsibility and will mount additional flights on August 18 to minimise inconvenience to the travelling public."
Even the regulator, the Directorate General of Civil Aviation (DGCA) is acting tough. It has issued an ultimatum to these airlines to refund the amount for the cancelled tickets as per the rules immediately if the ticket is purchased by cash, and within seven days if its purchased through credit card.
But it is a divided house on whether airlines should be given relief by the government.
"The government under no circumstances should be giving any bailout in terms of writing off loans. It will be criminal because it is taxpayers' money," said Captain G R Gopinath, founder, Air Deccan.
Airlines insists the taxes they pay are way higher than their international counterparts.
"All that we are saying is that give us a level playing field with international airlines. Airlines in India are paying 60-70 per cent higher for aviation fuel, which is the main input cost," said Ajay Singh, Director, Spicejet.
The government says airlines are responsible for their financial mess, but the airlines say the government is taxing them to death. One thing is certain -- with losses exceeding Rs 10,000 crore this year many carriers may disappear in thin air if no help comes their way.
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