Liquor baron Vijay Mallya, the promoter of Kingfisher Airlines, on Saturday questioned if it was the private carrier’s duty to operate flights on loss-making routes even as the government clarified that there was no move on the part of the government to propose a bailout package for the crisis-ridden carrier.
“This is to clarify that no such bailout package is pending before the government nor has been proposed by Ministry of Civil Aviation for the Kingfisher Airlines,’’ Civil Aviation Minister Vayalar Ravi said in a statement here on Saturday.
The Minister’s clarification came in the wake of Opposition criticising him over his statement that he would talk to the Finance Ministry to see whether banks and oil firms could provide some relief to the cash-starved airline.
Mr. Mallya while blaming the system of airlines in the country being overtaxed and overcharged, said that governments abroad have “gone out of the way” to support air carriers and connectivity.
With 50 more flights being cancelled on Saturday, the beleaguered airline has cancelled 210 flights since Monday, causing misery and inconvenience to thousands of air travellers.
Mr. Mallya tweeted: “Every government has gone out of the way to support airlines and connectivity. In India airlines are overtaxed and overcharged. Wonder why?”
In yet another tweet, he posed: “Is it Kingfisher's duty 2 (to) fly on loss making routes when state governments tax heavily? Or should v be financially prudent n fly profitably.”
Official sources said Kingfisher was free to approach the concerned ministries on issues concerning soft loans and for restoration of the credit line from oil companies for the supply of jet fuel.
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.
Senior officials of Kingfisher Airlines also held discussions with their legal and financial advisors even as its lenders began deliberations to consider if the struggling airline's debt could be restructured. Overall, banks, including SBI, ICICI Bank, IDBI Bank and Punjab National Bank, have an exposure of Rs. 7,700 crore to the airline. The airline has suffered a loss of Rs.1,027 crore in 2010-11 and has a mounting debt of Rs. 7057.08 crore.
Email to frequent flyers
Kingfisher also sent an email to its frequent flyers explaining the reasons for mass cancellation of flights. “We have decided to focus on the full-service market; to this end, Kingfisher Airlines has initiated reconfiguration of its aircraft. This exercise will require few of our aircraft to be out of service for the next few weeks.’’
“In line with maximising productivity, we have rationalised our network, resulting in a temporary discontinuation of approximately 50 flights out of our current operating schedule of approximately 350 departures per day. Once the reconfiguration is complete, these aircraft will be pressed back into service immediately,’’ the email sent by Anshu Sarin, Vice President, Guest Loyalty, said.
Meanwhile, aviation regulator, Directorate General of Civil Aviation (DGCA), has asked the carrier to give details of their plan to reconfigure its fleet to prevent a large-scale flight disruption as it had found that Kingfisher was not operating flights as per the approved winter schedule.
DGCA chief E.K. Bharat Bhushan also warned that if the airlines were found not operating the slots allotted to them, these will be given to others who are willing to operate “regardless of who it is”.