Why are Indian airlines in the red despite rising passenger traffic? Because of high taxes on fuel and rising operational costs. Moreover, cutthroat competition in the sector prevents airlines from raising ticket prices. Taxes constitute 40% of an airline's total expenditure, far above the global average of 32%. Besides, revenues barely cover operational costs. For instance, operating margin for Kingfisher stands at 0.12 while it is negative for Jet Airways (-8.25%) and Spice Jet (-6.7%). Fierce competition in the Indian skies prevents them from doing so. In the case of Jet, cost per available seat km (ASKM) rose to Rs 3.31 in the second quarter of this fiscal compared with Rs 2.74 in the previous quarter. In contrast, revenue passenger km (RPKM) has crawled up to Rs 3.63 from Rs 3.5. So if an airline goes bust, should the government bail it out?The tempting answer is that those responsible for corporate recklessness must bear the consequence, but in real world things are not so simple. Many experts argue that had Lehman Brothers not been allowed to go bust, the financial crisis could have been less damaging. But, a corporate bailout sends the wrong signal or creates a 'moral hazard' of encouraging more recklessness, the cost of which is borne by the taxpayer