Saturday, August 1, 2009

Private Airlines hold Govt. to ransom

By: Subhadeep Bhattacharjee

The proposed suspension of operations by the private airlines on August 18 demanding a bailout of the industry has come as a shocker to the government. This is for the first time that an entire industry had rebelled against the system. The private airlines union is holding the government to ransom demanding bailout in the form of lowering the sales tax on fuel and airport taxes.

The private airlines comprising Kingfisher, Kingfisher Red, Jet Airways, Jetlite, IndiGo, Go Air and Spice Jet which operate 1200 domestic flights against Air India’s 300 will have their entire fleet grounded unless the government meets their demands. Interestingly premium private carrier Paramount Airways has decided to continue with its operation on the proposed strike day. The government on its part is against any such bailout package to the industry.

The question now arises is should the government try to bail out the industry? The answer should be a straight NO. Why should tax payer’s money be used to bail out profit making business ventures? Many people in the lowest end of the tax bracket still cannot afford flying so why should their tax money be used to bail out the business of some of the countries richest industrialists. Every industry is facing the music due to the market downturn so why any exceptions should be made for the airline industry?

India’s aviation boom started in the new millennium with many new players entering the market. Many of them ran their operations in loss to grab the market. New planes were ordered and leased assessing future market demands. All was going well until the market downturn came. Airline still being considered a luxury industry in India was one of the worst effected industries. But still this is no argument to hold the country to a ransom in the name of a bailout?

Public money has more worthy projects waiting for it in a country where one third of the population lives below the poverty line. The same airline industry which is calling for a bailout won’t pay much attention to Corporate Social Responsibility when the market is on a boom. So why should the tax payer’s money be used to bail out rich men’s businesses at the cost of money being invested in the social sector?


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