India considers $1.6 billion package to rescue aviation sector

The package would include a suspension of aviation fuel tax

Air India Express
Air India Express

India’s aviation sector could receive a rescue package of up to US$1.6 billion from its government. Reported by sister publication Aviation Business Middle East, the package would include tax reliefs and a suspension of aviation fuel tax.

India’s Finance Ministry proposed the package would be between $1.3 billion and $1.6 billion.

Flights between key Indian hubs continue to get suspended as countries across the world attempt to curb the spread of coronavirus. In the UAE, both Etihad and Flydubai have halted or reduced operations between India.

A report from industry consultancy CAPA said: “In the absence of serious and meaningful government intervention, such an outcome could lead to several Indian airlines shutting down operations by May or June due to a lack of cash.”

According to Aviation Business, the International Air Transport Association (IATA) has called on governments around the world to consider direct financial help for airlines, including tax reliefs and bailouts.

IATA has suggested that the industry could need as much as $200 billion to save airlines from collapse.

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