Minister says Air India needs bailout: report

NEW DELHI, August 24, 2009 (AFP) – Air India needs a bailout of nearly 620 million dollars to keep flying, a minister said in remarks published Monday, in which he added he was certain the loss-making airline would survive.

“I want this reduced for both low-cost and full-service carriers,” he said. “I have always advocated a uniform tax on jet fuel.”

In a bid to cut costs Air India recently announced it would halve productivity-linked incentive payments for its 31,000 employees and also slash crew flying allowances by 50 percent.

The moves are part of a turnaround programme announced by the carrier that also includes moves to attract more budget customers and plans to rationalise its fleet and network. The flagship airline, which posted a 1.03-billion-dollar loss for the fiscal year ended March 31, and other Indian carriers have been hit by overcapacity in the industry and a sharp drop in passengers due to the economic slowdown.

“The airline will survive. Every time it was in trouble the problems were rolled over, and we will roll over this time also,” Civil Aviation Minister Praful Patel told India’s Business Standard newspaper.

Patel said he did not want the government to have to bail out t