Not just Air India and Jet, all airlines in the world suffering losses: Suresh Prabhu

New Delhi: With Air India unable to dispense salaries of employees for the month of July and Jet Airways too in a precarious financial spot, dark clouds have gripped India's aviation sector. Suresh Prabhu though said the problem of losses is not just faced by Indian airline companies but is a challenge the world over.

Reacting to queries on salary-related issues facing both Air India and Jet, the civil aviation minister said that airlines the world over are currently facing a big challenge. "Not just Indian airlines, all airlines in the world are suffering as their cost has gone up due to rise in fuel prices," Prabhu said. "Airlines cannot absorb this variable cost in their business module in a short time."

The Indian aviation sector has been booming in recent years with the number of passengers opting for flights steadily increasing. To keep ticket prices attractive in the midst of rising fuel prices though has been a challenge for domestic airline companies. While Air India delayed the salary to its staff for the month of July, it was finally given on Monday Tuesday. As for Jet, there were rumours that staff salaries would be stalled but reports later confirmed that while top executives would take a pay cut, staff salaries would not be held back.

Reuters data had revealed that Jet - partly owned by Qatar's Etihad - needs to repay about 30 billion rupees in loans and bond over the next three years. The prospects are, therefore, not very bright for the company. As for Air India, mounting losses have remained a serious concern for several years with privatisation being seen as the only option.