ibnlive » India

Nov 26, 2011 at 09:27am IST

PM to meet airline heads over financial crisis

New Delhi: Prime Minister Manmohan Singh will hold a meeting with the chiefs of major domestic airlines on Saturday to take stock of the financial health of the sector.

Airlines have been complaining about high fuel cost and unreasonable taxes levied on the sector against the backdrop of the financial crisis of Kingfisher Airlines. Jet fuel prices have increased by 30 per cent since December 2010.

Three major airlines - Jet, SpiceJet and Kingfisher have reported heavy losses in the second quarter.

Kingfisher's owner Dr Vijay Mallya, Jet Airways' Naresh Goyal and Rahul Bhatia of IndiGo are expected to attend Saturday's meeting.

Currently only 49 per cent Foreign Direct Investment is allowed in Indian carriers by non-airline players. The policy prohibits foreign airlines from directly investing due to security reasons.

Sources said the airlines are looking for a bailout, which is tough for the government to grant them as the Opposition will oppose it.