Air India needs to perform, no bailout for rest, says Ajit Singh

Taking a tough stance, new Civil Aviation Minister Ajit Singh has asked state-owned Air India to pull up its socks as government "cannot keep on pouring money". Singh ruled out any bailout for private carriers.

"Government is not in a position and will not bail out any private airlines. Air India is a public sector unit, so government has an obligation. But Air India will have to become competitive and restructure their costs... as the government cannot keep on pouring money," Singh said at sidelines of foundations stone laying ceremony of a new ATC tower at the Delhi airport.

Referring to the airline's debt restructuring plan by SBI Caps, which had "some hitch", Singh said they would be resolved jointly by Civil Aviation Secretary and the Finance Secretary.

The Finance Ministry is believed to have expressed apprehensions over the bailout plan, and banks' ability to take a haircut.

On the issue of allowing foreign airlines to pick up stake in domestic carriers, Singh said a Group of Ministers (GoM) will soon meet to decide. "Finally, the Cabinet will take the decision. The Committee of Secretaries has already recommended raising the foreign direct investment (FDI) limits in the sector," he said.

Asked about demands by private airlines for a bailout package, he said they will have to come up with a viable business plan. "If the banks are satisfied with their plans and think they can recover their money then they will lend money", he said, adding that the banks would have to go by the Reserve Bank of India norms.

On reports of safety being compromised by airlines due to their poor financial conditions, Singh said, "There are problems. Industry has grown so fast in past few years. There is shortage of trainee pilots, of stewardess... there are financial implications...But as far as question of jeopardising the safety of passengers is concern, there is no such fear. There is no compromise, DGCA will not compromise and the ministry will not compromise."

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