Govt won't bail out private airlines: Ajit Singh

New Delhi: Giving a clear message to ailing Indian carriers, Civil Aviation Minister Ajit Singh on Wednesday asked national carrier Air India to become competitive as the Government "cannot keep on pouring money" and told private carriers that there would be no bailout for them.

"The Government is not in a position and will not bail out any private airlines. Air India is a public sector unit, so government has an obligation. But Air India will have to become competitive and restructure their costs... as the government cannot keep on pouring money," Ajit Singh told reporters in New Delhi.

The Minister on Tuesday said that there was "some hitch" in Air India's restructuring plan by SBI Caps, raised by the banks. This would be resolved jointly by Civil Aviation Secretary and Finance Secretary, he said.

After laying the foundation stone for a new ATC tower at the Indira Gandhi International Airport here, Singh said a Group of Ministers (GoM) will soon meet to decide on allowing foreign airlines pick up stakes in the Indian carriers.

"Finally, the Cabinet will take the decision. The Committee of Secretaries has already recommended raising the FDI limits in the sector," he said.

His comments came in the wake of reports that government was exploring options to allow foreign airlines pick up equity in Indian carriers.

Asked about demands by private airlines for a bailout package, he said they will have to come up with a viable business plan.

"If the banks are satisfied with their plans and think they can recover their money then they will lend money", he said, adding that the banks would have to go by the RBI norms.

On reports of safety being compromised by airlines due to their poor financial conditions, the Minister said, "There are problems. Industry has grown so fast in past few years. There is shortage of trainee pilots, of stewardess... there are financial implications..."

"But as far as question of jeopardising the safety of passengers is concern, their is no such fear. There is no compromise, DGCA will not compromise and the Ministry will not compromise," Singh said.