RBI not opposed to SBI extending support to airline, says Deputy Governor
Kingfisher Airlines on Wednesday filed a fresh flight schedule with the Directorate-General of Civil Aviation (DGCA), bringing down its operations to about 170 daily flights with 28 functional aircraft.
The airline told the DGCA that it would operate flights in accordance with the revised schedule, which was being examined by the regulator.
On Wednesday, sixth day of disruption of its flight schedule, Kingfisher cancelled over 30 flights.
As reports about State Bank of India having a change of heart and extending help to Vijay Mallya's crisis-ridden airline came, Civil Aviation Minister Ajit Singh made it clear that the government would not give any bailout package to the private carrier.
“We have made it clear and I am sure that Mr. Mallya knows that Air India is a government concern. Whatever help we give them [Air India], we cannot do it to any private industry. We have said it before that banks will decide that [giving money]; the government is not going to interfere in it. Banks have to follow Reserve Bank of India guideline. They have to worry about their non-performing assets. They have to decide on the basis of the business plan of the company,'' he said.
SBI Chairman Pratip Chaudhuri refused to comment on reports that the bank was ready to help the airline, citing reasons of client confidentiality.
SBI has the maximum exposure to the troubled airline at Rs. 1400 crore.
The airline's consortium of lenders that includes SBI had been examining a debt-restructuring proposal also. Kingfisher's current debt stands at Rs. 7,057.08 crore and it is learnt to have requested the consortium to provide a working capital support of Rs. 200 to 300 crore.
The airline's bank accounts have been frozen for non-payment of taxes. It suffered a loss of Rs. 1,027 crore in 2010-11. Reserve Bank of India was not opposed to SBI extending support to the airline, RBI Deputy Governor K. C. Chakraborty said in Bangalore.
“Banks are commercial entities. If they feel by supporting a unit, if the unit can survive, they must explore that possibility. Banks are risk taking entities,'' he said.
In another development, bowing to the demand of the cash-starved aviation industry, the government on Wednesday issued a notification allowing private airlines to import aviation turbine fuel (ATF) directly.
Airlines, interested in importing ATF instead of buying from local refiners, will have to apply to the Directorate-General of Foreign Trade for licence, an official statement said. The notification said imports were allowed by or on behalf of Indian carriers on an actual use basis.
Kingfisher had been seeking permission for direct import so that it does not have to cough up high sales tax.