Airlines set up joint pressure group

Pricing to be outside federation's purview.

In a first-of-its kind move, 10 domestic passenger and freight airlines have formed a national federation that will address their problems and create a platform to work together.

Called the Federation of Indian Airlines (FIA), it will be headed by Air-India Chairman and Managing Director V Thulasidas and will act as a joint pressure group to convince the government about the infrastructure problems faced by most airlines.

Although other industry groups have set up similar associations, this is the first time the airline industry is coming together on this scale.

The association will also appoint a director-general. "We will appoint a head-hunter to identify one," said Kingfisher Airlines chief Vijay Mallya.

The initial corpus of the federation will be Rs 5 crore (Rs 50 lakh per airline). The contribution in the subsequent years would depend on the budget and the federation's needs but the minimum would be Rs 10 lakh, Thulasidas told a press conference after a marathon meeting of the airline bosses in Mumbai this evening.

Contrary to popular perception, Thulasidas said pricing would not be part of the federation's agenda. "Pricing is a decision of individual airlines. In any case, we have enough on our plate already," he added.

The federation would seek to hold interactions with the prime minister and his Cabinet to impress upon them the issues being faced by domestic airlines, Thulasidas said.

Though the federation will not sign any non-poaching pact, the airlines will explore means of sharing manpower and training facilities. Manpower and training costs have been hitting the airlines hard.

Weighed down by high fuel prices, a heavy tax burden, ageing airport infrastructure and serious capacity constraints, domestic airlines have already suffered a loss of Rs 2,500 crore.