New Delhi, July 31: The Congress-led government is unwilling to provide any more bailout packages to private airlines because they can easily raise cheap loans to tackle their cash-flow problem.

“Air India is a special case. The government owns it and is already committed to infusing equity in that airline. We cannot give any more to private airlines,” said top civil aviation officials.

Earlier, the government had allowed airlines, including Kingfisher and Jet Airways, the flexibility to pay their jet fuel dues of over Rs 2,900 crore in six interest-free instalments. This is seen by many as a form of bailout. The government had also stopped giving fresh licences a year back to limit the number of players and reduce competitive pressures on the existing operators.

Civil aviation minister Praful Patel, who is travelling abroad, had earlier said that there “could be no (more) bailout for private airlines. The promoters are big people they should find money for their airlines.”

Justifying a revival package for Air India, the officials said the national carrier operated on many uneconomic routes such as those in the Northeast and Kashmir. Besides, it had to often fly abroad on national duty.

“We cannot compare a bailout for Air India which has served national interests at the cost of its own economics with a package for private airlines who threaten to stop flying if they do not get help,” they said.

Finance ministry officials, however, said they had long proposed declared-goods status for jet fuel, which could help to reduce the value-added tax on it from as high as 29 per cent in some states to just 4 per cent across the country. Andhra Pradesh has the lowest tax at 4 per cent, while Tamil Nadu and Bihar have the highest at 29 per cent. Bengal charges 25 per cent.

The central government is empowered to accord declared-good status to any item, which will reduce the value-added tax on it to a uniform 4 per cent across the country.

However, the states, who earn large revenues from transport fuel, have opposed the move. They have not accepted the logic of a cut and have demanded greater details on the mechanisms of fuel price determination.

The officials said Asim Dasgupta, Bengal’s finance minister, had promised to look into the issue, after the government made a more detailed presentation of its case to the empowered committee of state finance ministers on VAT (value added tax).

However, the states are angry at the airlines for stopping services to many cities, pointing out that help cannot be a one-way traffic.

Jet fuel price up

State-run oil firms today increased jet fuel prices marginally by 1.6 per cent on the back of rising international oil rates.

The price in Delhi was increased by Rs 585 per kilolitre (kl) to Rs 36,923 per kl, effective midnight tonight, an official of Indian Oil Corporation said. The increase follows a sharp 5.7 per cent cut in jet fuel prices two weeks ago.

In the past two months, state-run oil marketing companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum had raised the aviation turbine fuel, or jet fuel, rates four times.

Jet fuel rates were Rs 31,614.51 per kl on May 1 and in four turns they were raised to Rs 38,557.56 per kl by July 1.

Jet fuel in Calcutta will be dearer by Rs 649 per kl at Rs 45,060. The rate was lowered to Rs 36,338 per kl on July 16.

In Mumbai, home to the nation’s busiest airport, the rate will be increased to Rs 38,098 per kl from Rs 37,475 per kl.