Privately owned Indian carriers threaten to strike

3 Aug 2009

India’s private carriers have announced a one-day work stoppage on August 18 to bring attention to their plight of soaring losses, high debt and declining passenger numbers.

The group, which handles about 80 percent of the subcontinent’s airline traffic, are demanding assistance from the government, which recently pledged to rescue state-run flagship carrier Air India, another victim of the current global financial crisis.

Anil Baijal, secretary-general of the Federation of Indian Airlines, representing seven private airlines, said there was an “urgency for the government to intervene immediately”.

Added Naresh Goyal, chairman of Jet Airways, India’s second largest carrier in terms of market share: “We need help to stay in business.”

India’s aviation sector was once one of its most dynamic growth engines but due to over-expansion, competition and fuel spikes, its fortunes have drastically plummeted. Last year, the entire sector was estimated to have lost about US$2 billion.

Vijay Mallya, chairman of Kingfisher Airlines, India’s largest airline by market share, said the strike could go on indefinitely unless the authorities took action. He said the industry’s losses “were no longer sustainable”.

He said he saw no problem with aid being extended to Air India. “It is owned by the people of India (but) we are also owned by the people of India – we have small public shareholders.”

The government respond to this threat, saying it sympathised with the airlines' situation and asked for talks. But if they insisted on suspending services, they face legal action.

Margie T Logarta

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