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Money News

Private airlines call off strike

A plane prepares to land at an airport in New Delhi June 4, 2008. REUTERS/Adnan Abidi/Files

NEW DELHI (Reuters) - India’s private airline operators on Sunday called off a strike planned for Aug 18, responding to a government offer to hold talks to see how the ailing industry could tide over its financial woes.

The Federation of Indian Airlines (FIA), which includes five of India’s top private airlines, said in a statement that the strike was also being put “on hold” in view of the inconvenience it could cause of thousands of passengers.

India’s aviation industry soared with growth of more than 25 percent in the past few years when the economy was booming, but is expected to lose $2.1 billion in 2009/10 because of high operating costs and a dip in demand after the economic slowdown.

Private airlines, seen as a symbol of India’s economic modernisation, carried about 83 percent of India’s 11 million air passengers in the June quarter.

“The... FIA hopes that constructive dialogue with the government will lead to redressal of the problems faced by the aviation industry,” the statement said.

Private airlines say they need the government to reduce taxes on jet fuel to a uniform 4 percent from the current average rate of 26 percent across various Indian states.

Aviation fuel makes more than 40 percent of the operating costs an airline. They also want the government to cut a number of other levies, including airport development and landing and navigational charges.

The downturn has also hit national airline carrier Air India, which has asked the government for an expensive bailout.

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