India is planning a rescue package worth as much as $1.6 billion for the aviation sector, which has been battered after the coronavirus outbreak forced countries to close borders and brought air travel to a near-halt, as per recent news reports.
The Finance Ministry is considering a proposal that includes the temporary suspension of most taxes levied on the sector, including a deferment of aviation fuel tax.
The rescue package, proposed by India’s civil aviation ministry, is likely to be worth up to 100-120 billion rupees ($1.3-$1.6 billion).
Governments the world over are scrambling to rescue airlines that have been forced to park planes and cut jobs as the virus puts the brakes on travel. Airlines may need a bailout of more than $200 billion, the International Air Transport Association (IATA) estimates.
The Trump administration, earlier on Wednesday, sought approval from Congress for $50 billion in secured loans to U.S. airlines to address the financial impact during the crisis.
Vistara, a joint venture of Singapore Airlines and India’s Tata Group, and budget carrier GoAir have suspended their international operations. IndiGo, India’s biggest carrier, has canceled several overseas flights and may be forced to park some planes as domestic air travel also falls.
CAPA estimates that Indian airlines, excluding state carrier Air India, will report losses of up to $600 million for the January-March quarter, which could worsen if demand continues to fall.