News / Asia

Indian Airline Industry Scrutinized After Mass Flight Cancellation

A car moves past Kingfisher Airlines aircraft parked at the airport in New Delhi February 21, 2012.
A car moves past Kingfisher Airlines aircraft parked at the airport in New Delhi February 21, 2012.
Anjana Pasricha

In India, mass flight cancellations by one of the country’s biggest airlines have turned the spotlight on the country’s struggling aviation sector. The government says it is trying to address the problems faced by an industry crucial to the growth of India's economy.

Hundreds of passengers were stranded, across the country, as Kingfisher Airlines announced more flight cancellations on Tuesday. The airline is operating less than half of its 64 planes and has scrapped nearly 100 flights on some of the busiest routes in recent days.

Kingfisher has been cash-strapped for several months. But the company's problems deepened when tax authorities froze its bank accounts after it failed to pay taxes. Many pilots have quit as the airline battles to pay creditors and staff.

Until last year, Kingfisher was counted as India’s premier airline, but it is now the worst hit among domestic airlines that are struggling with debts and losses.

Regulators Tuesday ordered Kingfisher to prove its operational viability and said its safety standards would be scrutinized.

Aviation Minister Ajit Singh has ruled out a bailout for the company. But he says the government is concerned about the health of a sector that is crucial for the country’s developing economy.

“Any industry, if one big company goes down, it does affect people," Singh admitted. "Since demand is more and seats are less, we have to monitor. Safety issues are there and safety is impacted by the financial situation also.” 

Minister Singh expressed hope that a recent proposal to allow foreign investors to buy stakes of up to 49 percent in domestic airlines will give cash-strapped Indian carriers access to more funds. The policy has been approved, but has not yet been formally implemented.

However, aviation analysts say the government also needs to address other problems faced by the industry. High taxes on aviation fuel in India make it expensive. Several states also levy high local taxes. As a result, fuel accounts for 40 percent of the operating cost in India, as opposed to 20 percent in most other countries. A fierce price war among carriers has resulted in airlines selling tickets at discounted prices.

Sanat Kaul, chairman of the India chapter of the International Foundation for Aviation and Development, says foreign investors are likely to run into the same problem as the domestic industry.

“I don’t see how foreign investment by airlines is going to improve the overall scenario," Kaul said, "unless the government changes certain policy parameters which are leading to this kind of loss…taxation, import of fuel.”

India’s aviation sector expanded at a furious pace in the past decade as domestic traffic grew. But it could post losses of $3 billion in the financial year that will end in March.

You May Like

Polls Open in Scotland Independence Vote

As race to persuade undecided voters continues, 'No' voters say they believe life in Scotland will slowly improve, 'Yes' vote not worth the risk More

China-India Border Standoff Continues as Leaders Hold Summit

New Delhi accuses hundreds of Chinese soldiers of illegally entering Indian territory in disputed region of Ladakh More

Ukrainian Activist in Despair About Future of Her Country

IrIna Dovgan, accused of being a spy and tortured by pro-Russian separatists, is appealing to UN Human Rights Council to support her country More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
A Dinosaur Fit for Land and Wateri
X
September 17, 2014 8:44 PM
Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.
Video

Video China Muslims Work to Change Perceptions After Knife Attacks

China says its has sentenced three men to death and one woman to life in prison for a deadly knife attack in March that left more than 30 dead and 140 injured. Beijing says Muslim militants from China's restive western region of Xinjiang carried out the attacks. Now, more than six months after the incident, residents in the city are still coping with the aftermath. VOA's Bill Ide has more from Kunming.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid