India rules out rescue for Kingfisher

Vijay Mallya, chairman and CEO of India's Kingfisher Airlines, gestures as he speaks during a news conference in Mumbai in this file photo. Picture: AFP

Thursday, February 23, 2012

INDIA'S civil aviation minister yesterday ruled out a government bailout of Kingfisher Airlines as the cash-strapped carrier submitted a new flight schedule after days of cancellations.

Kingfisher has scrapped scores of flights over the last four days, leaving passengers stranded at airports and the airline's owner, brewing magnate Vijay Mallya, battling to save the debt-laden company.

Among at least 20 flights cancelled yesterday were 14 from the financial hub Mumbai.

"We are not going to bail out Kingfisher but we hope it can mobilise resources," Civil Aviation Minister Ajit Singh told reporters in New Delhi.

The airline submitted a fresh flight schedule to the Directorate General of Civil Aviation after the regulator on Tuesday ordered it to come up with a "realistic" timetable for passengers.

Just 28 of Kingfisher's fleet of 64 registered aircraft are in operation, according the DGCA.

"Kingfisher has submitted an updated schedule of flights. We are still reading and analysing it," DGCA director general Bharat Bhushan told AFP.

The airline declined to comment on its submission, which came as a consortium of more than a dozen lenders, led by State Bank of India (SBI), was reported to be considering providing funds to the airline. "The banks will decide (about pumping in more money)," Singh said, adding the government would not interfere.

The banks "have to decide on the basis of the business plan of the company. If they are satisfied with the business plan, they can lend money," he said.

The airline, India's second-largest private carrier until earlier this year when its cash crunch woes deepened, has blamed its latest problems on officials freezing its bank accounts for not paying tax arrears.

AFP


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