Should we fly loss making route:Kingfisher, Govt no to bailout

www.mangaloretoday.com

New Delhi, Nov 12, 2011: Crisis-hit Kingfisher airlines today questioned whether it was the private carrier’s duty to fly on loss-making routes, even as Government said there is no move to bail out the airline which has cancelled 210 flights in six days. 

Kingfisher owner Vijay Mallya while blaming the system of airlines in the country being overtaxed and overcharged also said governments abroad have "gone out of the way" to support air carriers and connectivity.

 

With 50 more flights being cancelled, the beleaguered airline has cancelled 210 flights since Monday putting hundreds of passengers to inconvenience. "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. Ravi’s clarification came aagainst the backdrop of Opposition flak 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-strapped airline.

On the other hand, Mallya, who had earlier this week sought government help, tweeted: "Every government has gone out of the way to support airlines and connectivity. In India airlines are overtaxed and overcharged. Wonder why?" In another tweet, he posed: "Is it Kingfisher’s duty 2 fly on loss making routes when state governments tax heavily? Or should we be financially prudent and fly profitably".

Official sources said while no bailout was being given by the government to Kingfisher, it was free to approach the concerned ministries on issues concerning soft loans and for restoration of the credit line from oil PSUs for the uplift of jet fuel.

Kingfisher CEO Sanjay Aggarwal said the airline has not made any bailout request to the government but admitted "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."

Courtesy: IBN Live