Kingfisher says it has not sought bailout

Updated - November 16, 2021 11:57 pm IST

Published - November 14, 2011 01:35 am IST - Mumbai:

Even as a political storm is brewing over a bailout for the troubled Kingfisher Airlines, the airlines has said that it has not asked for any bailout from the government.

“Kingfisher has not made any bailout request to the government. We have only asked our banks for an increase in limits due to significant increase in operating costs caused by increase in fuel prices and rupee devaluation,” a statement issued by the Chief Executive Officer of Kingfisher Airlines Sanjay Aggarwal stated on Sunday.

Meanwhile, the bankers of Kingfisher continued having further rounds of talks on the second day on Sunday here to decide on issues of debt restructuring.

The company has already cancelled 40 flights till now, 10 of which are from Mumbai. But Mumbai International Airport Authority Limited (MIAL) officials said the chaos at the airport had subsided substantially on Sunday, a few days after the airlines started cancelling flights across sections.

“Ten flights have been cancelled for the past four days and the coming four days from Mumbai,” an MIAL spokesperson told The Hindu . “There was no chaos at the Mumbai airport on Sunday as the passengers were informed in advance about the flight cancellations,” another spokesperson said.

Around four days ago, when the company announced its cancellations, it resulted in chaotic and angry scenes at the airport with many passengers stranded and agitated. The prices across segments also shot up.

Meanwhile, the company has said that no flights have been cancelled due to lack of pilots or other staff. “The attrition of 100 pilots did not happen overnight. Kingfisher has sufficient number of pilots and a robust pipeline of new pilots to continue to operate its scheduled flights,” Mr. Aggarwal said.

The statement issued by him also claimed that all the employees had been paid their salary. “There has been a few days delay for the last 2-3 months in payment of employee salaries. However, all employees have been paid in the month the salaries [that] were due,” it said.

It stated the company was not struggling in isolation, but the entire Indian aviation industry was struggling due to high costs and lower yields. “The airline industry in India is going through a tough period due to high costs and lower yields. This is evident by the unprecedented losses recently reported. To counter these pressures and leveraging its strengths, Kingfisher decided to rationalise network, drop unprofitable flights and expedite its fleet reconfiguration. This initiative will improve the long-term profitability of the airlines,” he said.

He said Kingfisher did not see any risk to its future or long-term viability. Data has shown that the Vijay Mallya-led UB Group, of which Kingfisher Airlines is a part, has lost nearly half of its market value from its peak scaled in the past one year.

The Airlines has said it was complying with the credit terms and payment arrangements made with all its vendors. The company has said the reconfiguration initiative that has been started by it “will require up to three aircraft to be out of service over the next three months at any one time for this exercise to be completed. It will reduce the number of fleet configurations from seven to three, improving operational flexibility.”

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