Cash help, loans, tax holiday: Ficci seeks aviation bailout


The Federation of Indian Chambers of Commerce and Industry (Ficci) has called for a bailout for the domestic aviation industry, including direct government cash support, interest-free subsidized loans, and a two-year tax holiday to help the sector to overcome the Covid- 19 crisis.

He also advocated for deferral of term loans for up to six months, a 180-day credit window from oil marketing companies, and waiver of aircraft insurance premiums, among others.

At the same time, Ficci also urged the government not to allow operations until all states completely lift the lockdowns, saying restoring partial services would only add to the financial problems of domestic carriers.

The coronavirus pandemic has hit the aviation industry the hardest, with the total or partial shutdown of commercial flight services resulting in substantial losses for all stakeholders, including airlines and airports.

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“The aviation industry is facing a crisis of unimaginable proportion due to the impact of the Covid-19 pandemic. With extended travel restrictions in place around the world, one of the main challenges facing the aviation industry is a massive drop in cash reserves. fleets have been grounded for almost a month now.

“Many airlines are on the verge of bankruptcy,” said Anand Stanley, chairman of the aviation committee of Ficci and chairman and managing director of Airbus India and South Asia, in his recommendations to the secretary of aviation civilian Pradeep Singh Kharola.

Global airlines of the International Air Transport Association (IATA) estimate that nearly 30 lakhs of jobs are at risk in India’s aviation-dependent sectors, he said in the committee’s recommendations to the government. Friday.


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In addition to cutting back on flights, airlines are stockpiling planes, advancing fleet withdrawal dates and postponing delivery of new planes, he said, adding that what the Indian aviation industry needed to survive. , it was an immediate government bailout.

“We also urge the government not to remove the grounding until and unless states also remove their blockages, so people can actually travel.

“If the blockage is lifted but people are still not able to travel freely, it will worsen the situation, as donors and other creditors will then further increase the intensity of their demands believing that our income generation capacity is back, when it is not. The demand will not come back unless the blockages are completely removed, “he said.

Significantly, this runs counter to the position taken by local carriers, some of whom quickly announced the gradual resumption of services from May 4, immediately after the government extended the lockdown until May 3, in their attempt to woo customers. .

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Ficci, in its recommendations, said the EMI’s deferral on term loans should be extended for up to six months and airlines should be extended interest-free subsidized loans for a period of one year, in addition to the tax exemption and not the deferral for a period of two years.

He also said that interest, penalties, deferred fees and accrued liabilities to airport operators should be removed for airlines, and airport operators could be adequately supported by the government to make up the gap.

Recommending that loans, loan guarantees and corporate bond market support by the government or the RBI, either directly to airlines or commercial banks, be required, he said it is likely that banks are reluctant to extend credit to airlines in the current situation in the absence of such guarantees.

The corporate bond market is a vital source of liquidity, but eligibility for corporate bond support needs to be extended by the central bank and guaranteed by the government to allow access to a wider range of companies. , did he declare.

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The liquidity position of all airlines will benefit if the interest-free, unsecured credit period for paying fuel costs to oil marketing companies is increased to 180 days instead of the current 21 days.

In addition, he also called for the deferral of the payment of GST for airlines as well as discounts on social charges paid so far this year and / or an extension of payment deadlines for the remainder of 2020, as well as a temporary exemption from ticket taxes and other government-imposed levies.

Ficci said that financial assistance in terms of reduced airport charges, overflight charges, passenger security taxation, parking and landing fee waivers should be provided as well as airport charges for l use of infrastructure, among others.

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