Govt will not bail out Kingfisher Airlines: Ajit Singh

Mangaloretoday/CNN/IBN

Hyderabad, March 14: Union Civil Aviation Minister Ajit Singh on Wednesday said the government would not bail out struggling air carrier Kingfisher Airlines, and it was the responsibility of promoter Vijay Mallya to steer it out of the crisis.

"The government cannot and will not bail out private companies, but that does not mean we want private airlines to close down," Singh said at a press conference in Hyderabad.

 

 

He added that it was for Kingfisher promoter Vijay Mallya to marshal funds to bring the carrier out of the financial crisis.



Singh also said the Directorate General of Civil Aviation (DGCA) would submit its report on Kingfisher in a couple of days.

Meanwhile, the DGCA has said that Kingfisher Airlines did not stick to its recovery plan submitted to the regulator in February and the situation is a grave concern to the public and the government.

Singh’s remarks are in line with Finance Minister Pranab Mukherjee’s statement in Parliament on Tuesday that the State Bank of India (SBI) has no plans to provide fresh loans to the debt-ridden company.

Mukherjee had said, "SBI has informed that currently there is no such plan to provide additional loan to Kingfisher Airlines."

The airline has a debt of Rs 7,057.08 crore. The financial crunch has hit its operations with dozens of flights being cancelled regularly. Tax authorities have added to its woes by freezing its bank accounts for non-payment of dues.

Mallya had told reporters that the airline was "facing a serious handicap" as its accounts are frozen and stressed, "We are not asking for bailout from the government but hope for help from banking sector to de-freeze our accounts".

The airline has apologised to passengers for the inconvenience caused by the cancellation of flights and said Mallya will meet pilots tomorrow over unpaid salaries.