Reluctant To Raise Fares, Indian Airlines Seek Government Help To Get Unsecured Credits From Oil Firms, Airports

Indian airline companies have sought the government's assistance to help them tide over financial difficulties as rising oil prices have threatened their fiscal stability, as reported by Bloomberg. These companies have asked the government to help them get unsecured credit from oil companies and airports.

The airlines are also reluctant to increase fares on their carriers in response to the rising fuel prices due to increased competition and aggressive pricing adopted by many players in the market. Federation of Indian Airlines, an industry body, stated in a letter to the government that airline companies are “facing challenging times and substantial losses in the domestic environment.”

With rupee facing turmoil in the forex market in the last few months, jet fuel prices reached a high in October 2018. These were the highest since March 2014. The combined losses of aviation firms could also reach $1.9 billion in the financial year ending in March 2019, according to CAPA.

The debt-laden Jet Airways is in the market for an investor to pump in capital and help it tide over its financial difficulties. The government's Air India privatisation plan also failed to attract investors. This has forced the national carrier to offload its non-core assets to cover its losses.