New Delhi: Defending Kingfisher Airlines, which has cancelled several flights this week while struggling with a pilot exodus and huge debts, promoter Vijay Mallya on Saturday asked whether it was his carrier’s duty to fly on non-profitable routes in a heavily taxed environment even as Prime Minister Manmohan Singh said the Indian government will find ways to help the airline.
The Prime Minister’s statement came as even as Civil Aviation Minister Vayalar Ravi denied any bailout package for the airline on the pattern of national carrier Air India.
“Is it Kingfisher’s duty to fly on loss making routes, when state governments tax heavily? Or should we be financially prudent and fly profitably,” Mallya posted on his micro-blogging site Twitter account.
“Every government has gone out of the way to support airlines and connectivity. In India, airlines are over taxed and over charged, wonder why,” he tweeted.
Meanwhile, in a statement, Ravi said: “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.”
However, the Prime Minister said that he will meet the Civil Aviation Minister to discuss the ways to help Kingfisher Airlines.
“A private airline has to be managed efficiently, but if there are difficulties we have to find ways and means to help them,” Manmohan Singh told reporters while returning from the SAARC summit in the Maldives.
“I have not applied my mind. I will talk to Vayalar Ravi and we will find ways to help the airline,” he said.
Speculation about a bailout came on Friday after Ravi said that the government was monitoring the situation and that he has spoken to the finance and petroleum ministers about the company’s issues.
“He (Mallya) has met me and explained the situation. He has not been able to get financing from banks. So, I have had a word with the Finance Minister about it,” Ravi told reporters in the national capital on Friday.
“It (Kingfisher) is in an unfortunate situation. As the government, we don’t want the airline to close down. We want them to fly,” Ravi added.
The carrier said it has not asked for any such package but only requested the lenders to increase the borrowing limit.
“Kingfisher has not made any bail out request to the government. We have only asked our banks for an increase in limits due to significant increase in operating costs,” Sanjay Aggarwal, chief executive, Kingfisher Airlines said in a statement.
The developments came after the airline curtailed 40 flights for the fifth consecutive day, a move, the company said, was taken to rationalise route plans and improve yields.
“Kingfisher Airlines has rationalised its network to offer maximum and seamless connectivity. As per the revised schedule, it will offer 300 daily flights connecting 54 cities as compared to its previous schedule of 340 flights,” Aggarwal said.
But the damage was already done as the company’s stock had plummeted to a new low on Friday after the aviation regulator issued a notice to the carrier seeking an explanation on the flight cancellations it has resorted to apparently to cut costs.
The company’s stock at the Bombay Stock Exchange (BSE) declined over 19 per cent in early trade on Friday to a new low of Rs. 17.55. It, however, pared some of the losses and closed the day at Rs. 19.65, down 9.45 per cent.
Apart from the stock market losses, the airline also owes huge amounts to oil companies, the Airports Authority of India and private airport operators, the GVK and GMR Groups. The airline has not posted any profit since its launch five years ago, and reported a net loss of Rs. 1,027 crore last financial year and Rs. 263 crore in the last quarter.