Prime minister Manmohan Singh on Saturday assured that the Government would find ways to get Kingfisher Airlines out of the trouble.
Prime minister Manmohan Singh on Saturday assured that the Government would find ways to get Kingfisher Airlines out of the trouble, just when civil aviation minister Vayalar Ravi seemed to have distance himself from any “bailout” for the troubled airline.
Ravi’s clarification follows criticism by both, the Congress and the BJP on Friday of any move by the government to bail out Kingfisher. Both parties had pointed out that as a private airline, it was Kingfisher’s duty to find ways to remain viable and the airline should shut down if it cannot sustain itself.
Speaking to reporters on board Air India One, Singh said though the private sector should be more efficient, his government would try to find ways to get Kingfisher out of trouble and that he would speak to Ravi about this issue.
Meanwhile, Kingfisher chairman Vijay Mallya on Saturday wondered whether his airline was supposed to fly on loss making routes and added that airlines in India were “overtaxed and overcharged”. “Every government has gone out of the way to support airlines and connectivity. In India airlines are overtaxed and overcharged. Wonder why?” he tweeted. Over 40 Kingfisher Airlines flights were cancelled today, over 200 since Monday.
Kingfisher CEO Sanjay Aggarwal said the airline has not made any bailout request to the government but admitted to having asked the banks for an increase in limits due to significant increase in operating costs caused by increase in fuel prices and rupee devaluation. Lenders to the airline began deliberations to consider if the struggling airline’s debt could be restructured. Overall, banks, including SBI, ICICI, IDBI and Punjab National, have an exposure of Rs. 7,700 crore to the airline. The airline has suffered a loss of Rs.1,027 cr in 2010-11 and its debt stands at about Rs 7000 cr.
Meanwhile, Kingfisher Airlines has sent an email to its frequent flyer club members to explain the reasons for cancellation of numerous flights, asserting that the move was necessary to reconfigure its aircraft to focus on the full-service market.
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