India’s airlines in line for $1.6 billion rescue package

‘Several Indian airlines could shut down by June’ if government does not intervene, warns CAPA
Air india, Indigo, Indian airlines, SpiceJet

India’s aviation sector could receive a $1.6 billion rescue package from the government, according to media reports.

Industry groups and airlines across the world have been asking for government aid in recent weeks to help businesses weather the Covid-19 crisis.       

Sources familiar with the matter told Reuters that India’s finance ministry is considering tax reliefs, including a suspension of tax on aviation fuel.

The proposed package amounts to between $1.3 billion and $1.6 billion, according to one of the sources, who said that taxes could be deferred until the virus spread is contained.

India has so far reported around 150 cases of Covid-19 and three deaths.

The International Air Transport Association (IATA) has called on governments around the world to consider direct financial help for airlines, including tax reliefs and bailouts.

IATA estimates that the industry could need as much as $200 billion to save airlines from collapse.

India’s carriers have been forced to cancel both international and domestic flights because of the drop in travel demand.

Some of the country’s more vulnerable carriers and those which rely heavily on international routes, face bankruptcy according to industry analysts. National carrier Air India is deemed to be most at risk.

A report from industry consultancy CAPA said: “In the absence of serious and meaningful government intervention, such an outcome could lead to several Indian airlines shutting down operations by May or June due to a lack of cash.”

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