Kingfisher cannot be closed down says Ajit

Kingfisher cannot be closed down says Ajit

By: || Updated: 29 Feb 2012 04:43 AM

Beleaguered Kingfisher Airlines cannot be closed down just
because it is making losses and banks are not helping it out with funds,
civil aviation minister Ajit Singh said on Wednesday.

"You can't close down a company because they are making losses or banks
are not giving them money. As long as passenger safety is not jeopardised,
as long as they keep their schedule, why should we close down any
industry," civil aviation minister Ajit Singh told reporters.

He was responding to a question from reporters whether the government
would take stringent action against the airlines if it flouts rules.

His comments came even as the Vijay Mallya-owned carrier was asked by its
bankers to infuse fresh equity on its own before they lent it additional

Bank chiefs have been quoted as saying that Kingfisher would need to
arrange fresh equity of Rs 1,000-2,000 crore before seeking additional
funds from the consortium of banks, led by the State Bank of India.

To another question, the minister said closing down of any airline would
impact passengers.

He said Kingfisher has submitted a new schedule of its flights to the
Directorate General of Civil Aviation (DGCA) which would closely monitor

A consortium of 18 banks, comprising 14 state-owned and four private
banks, have provided huge sums to the cash- strapped airlines, which has a
total debt of about Rs 7,057 crore and accumulated losses of about Rs
6,000 crore.

The banks are expected to hold meetings with the Reserve Bank of India on
the financial mess facing the airline as its loans are reportedly turning
to non-performing assets in the past weeks. They are expected to take a
call on whether or not to extend fresh credit line to the ailing carrier.

Kingfisher's net loss shot up to Rs 444.26 crore for the quarter ending
December 31, 2011 from Rs 253.69 crore in the October-December quarter of
the previous fiscal. It has suffered a loss of Rs 1,027 crore in 2010-11.

ailing carrier has been put on cash-and-carry mode by the Airports
Authority of India (AAI) as well as the oil companies for airport charges
and jet fuel supplies.

Compounding its troubles, the excise authorities have frozen the bank
accounts of the carrier for its failure to pay service tax dues of about
Rs 35 crore. The Income Tax authorities had earlier frozen Kingfisher's

As per its new schedule, Kingfisher is now operating about 170 daily
flights against over 400 it sought permission for in November. It would
not be operating direct flights to some major cities and several Tier-II
cities now on, as per the truncated schedule it has submitted to the DGCA.

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