Kingfisher crisis: Mallya seeks govt help to fly with the good times

Vijay Mallya’s debt-ridden Kingfisher Airlines is almost grounded and he has asked the central government to bail him out.
As its shares crashed to a record low and more flights were cancelled (40 were withdrawn) for the fifth day in a row on Friday, civil aviation minister Vayalar Ravi promised to help the struggling airline.

Ravi spoke to finance minister Pranab Mukherjee to get state-owned banks to help Kingfisher with loans. He also wants to approach the oil minister for allowing the airline to buy Aviation Turbine Fuel (ATF) on credit.

But the question doing the rounds in political circles, including the Congress, is should the government help a private company. “It remains to be seen whether in a market economy the government will walk the extra mile to bail out a private company or it should allow the shake-out to take place and the fittest to survive,” Congress spokesperson Manish Tewari said.   

The BJP too does not want the government to bail out Kingfisher. Party leader Yashwant Sinha said the BJP would not support any such government move. “If Kingfisher is incapable of running on its own, it should shut down,” he said. “This is not a socialist era where the government has to bail out private companies and run them as white elephants.”

Kingfisher is saddled with almost Rs7,000 crore in loans and banks have stopped giving further loans as the airline has defaulted on repayments. Oil companies have refused to provide ATF unless the airline makes an upfront payment. It already owes more than Rs500 crore to the oil companies.

Ravi has also promised to speak to prime minister Manmohan Singh and apprise him of the struggling airline industry. The last time Singh intervened was when the situation spiralled out of control at state-owned Air India.