The civil aviation industry has faced a staggering loss of Rs 4,000 crore in 2007-08 and this could double in the current fiscal depending on the fuel prices, according to industry estimates.
Patel, who has expressed serious concern over the health of the industry, is joined by industry leaders, Jet Airways Chairman Naresh Goyal and Kingfisher Airlines' Vijay Mallya, in raising concerns over the "crisis" situation, which industry experts feel could see some airlines going bust, like in the early 1990s.
Fearing such a situation, Patel has said, he would raise the concerns expressed by the airline industry. He is likely to make a presentation to the Prime Minister and Finance Minister P Chidambaram about the difficulties being faced by the aviation industry. Some airline chiefs are also expected to join the meeting tomorrow.
The meeting comes in the backdrop of several airlines trying their best to curtail costs. Some of them are even contemplating pruning their services, delaying their fleet induction plans or even grounding some aircraft, experts said.
The airlines are also in a fix as they could not pass on the entire burden of fuel price hike to the travellers, as this would eat into their market share.
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Noting that the financial health of the industry was being adversely affected by high fuel prices and higher taxation on it, Patel has said "these are very serious issues and this shows that things are not well with the industry."The Indian carriers have said the recent decision by oil firms to cut jet fuel prices was a welcome but an "insignificant" step and would not have much impact either on the fuel costs or passenger fares.
Officials of several airlines said the reduction in ATF prices would neither offset their losses nor slash their fuel bill which constitute about 40 per cent of the total operating costs.
A top aviation expert recently said with jet fuel prices on an upward spiral globally, Indian carriers should either consolidate and restructure or would be forced to exit the market.
"There are a large number of new entrants and there exists a huge amount of capacity in India. Rising fuel costs will accelerate the restructuring of this capacity.
"The new entrants and even large leading carriers will find it difficult to maintain their bottom lines because high costs and high capacity have to be matched. So, it is either consolidate or exit the market," said IATA's Chief Economist Brian Pearce.