NEW DELHI (Reuters) – India’s new civil aviation minister said on Friday he is confident that airline capacity shortage problems following the grounding of Jet Airways Ltd will be solved, in the government’s first comments about the issue since it was re-elected last month.
We are “very confident we can solve that problem,” Hardeep Singh Puri said on the sidelines of a conference in New Delhi.
Massive debt and suffocating price competition forced what was once India’s biggest private-sector airline to halt operations in April at the cost of thousands of jobs, and resulting in higher airfares across the industry. It has also resulted in capacity constraints across the industry.
The airline and its lenders have been searching for new investors, while employee unions have been calling for government intervention. The government, however, has largely been quiet on the Jet issue since its election victory.
Puri has assumed office at a time of distress in areas of Indian aviation. Last year, the government unsuccessfully sought a buyer for money-losing state-owned carrier Air India Ltd.
“We have made mistakes in civil aviation in the past which we need to correct,” Puri said.
Jet’s share price was 9% lower in early afternoon trade. The stock sunk in the last two trading sessions after India’s largest stock exchange limited speculative trading in the firm.
(This story corrects headline, first and second paragraphs to reflect that minister was addressing aircraft capacity issue and not Jet Airways issue.)