24 October 2008

India says no to airline bailout

The Indian government said on Thursday that it wouldn't bail out its ailing airlines but would extend the credit period for the cash-starved carriers to pay their fuel bills, according to Agence France-Presse.

Indian airlines had sought a bailout package worth 47.50 billion rupees ($1 billion) to help them deal with falling passenger traffic and rising jet fuel costs.

However, AFP quoted Civil Aviation Minister Praful Patel as saying no bailout was on offer.

"No financial relief has been given to the private airlines," he told parliament. But "the credit period for current purchases of fuel has been increased to 90 days from existing 60 days."

India's domestic airline sector posted a combined loss of $938 million in the fiscal year to March 2008, and analysts expect losses to touch $2 billion this year, the report said.

A Report by The Mole

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