JOIN USOn a day when its stock prices plummeted by a whoppping 19 per cent, the liquor baron Vijay Mallya-led airline did not get any assurance from the government. Civil Aviation Minister Vayalar Ravi, who Mallya met about a week ago explaining the deep financial mess that the airline has plunged into, said he has spoken to Finance Minister Pranab Mukherjee and Oil Minister S Jaipal Reddy. “He (Mallya) has met me (recently) 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 said.
Apparently, his talk with the finance minister centred around additional loans to the airline by the banks and with Reddy regarding the huge arrears that the carrier has to pay to the oil marketing companies.
“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.
It is learnt that the banks which have lent to the airline are likely to meet in Mumbai either on Saturday or Monday next to discuss further advances to the ailing carier.
The airline owes huge amounts to oil companies, the Airports Authority of India and private airport operators GVK and GMR Group. The airline has not posted any profit since its launch five years ago, and reported a net loss of Rs 1,027 crore last fiscal and Rs 263 crore in the last quarter.
Even as Kingfisher was battling with its depressing financial situation, the rival airlines were not covering themselves with glory. Jet Airways, India’s top airline by market share, on Friday said it swung to a net loss of Rs 713.60 crore for the second quarter of 2011-12, due to high prices of aviation turbine fuel and a depreciating rupee. The airline had a net profit of Rs 12.40 crore in the corresponding period of the 2010-11.
Budget airline SpiceJet reported a loss of Rs 240 crore for the second quarter of the fiscal, on spiralling fuel prices and a weakening rupee. During the quarter ended September 30, 2010, SpicJet had a net profit of Rs 10 crore.
BJP opposes concession
However, the BJP was dead against any bailout package. “As a finance man I cannot support such a concession to a private sector entity,” BJP leader and former finance minister Yashwant Sinha said.
On its part, Kingfisher said it has not made any bailout request to the government. “ 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,” airline CEO Sanjay Agarwal said.
“There has been a few days delay for the last 2-3 months in payment of salaries. However, all employees have been paid in the month the salaries were due. Kingfisher does not see any risk to its future or long term viability. The whole Indian Aviation Industry is struggling due to high costs and lower yields. We are no exception,” he said, admitting that over 100 pilots have quit in the last few months.