The civil aviation ministry has sent a fresh proposal to the Centre asking for an extension of 90 days to the guarantee provided to Indian Airlines (IA) and Air-India (A-I) for covering third party insurance over $50 million. On September 28, the government had issued a 15-day comfort letter to the two state-owned carriers.
The Centre will, however, charge the two carriers 0.25 per cent per annum on the guarantee. When contacted, finance ministry officials said the Centre was not averse to extending the guarantee provided to IA and A-I, but it would not come free.
The carriers are averse to forking out any fresh per-passenger surcharge over and above the existing $1.25 and 0.05 per cent of the fleet value. The insurers have demanded Rs 250 per passenger for raising the third party cover to $1 billion from the existing $50 million.
The government
