Banks may bail out KF, for now

Providing a ray of hope to the ailing Kingfisher Airline, a group of lenders Wednesday said they were considering extending short-term capital in order to pull the cash-strapped carrier out from the financial rut.

The consortium of 13 banks, headed by the State Bank of India, which has the largest exposure to the loss-making carrier, however, was not sure of the quantum of money to be lent, according to sources.

The crisis-prone airline on Wednesday submitted the revised schedule as demanded by Directorate General of Civil Aviation in which it said it would operate about 170 daily flights with 28 functional aircraft.

It is a far cry from October last year, when the carrier, while submitting its winter schedule to the aviation regulator, had sought permission to fly over 400 planes per day. The Vijay Mallya–owned airline partially resumed flights from Kolkata, where its staff had gone on strike.

The government, sceptical of directly doling out to any private airline, also said it had no problems if banks decided to extend financial support. “If the banks can loan them money, it is fine," Civil Aviation Minister Ajit Singh said.

He was reacting to reports Wednesday said that the SBI had decided to extend a fresh relief package of over Rs 1500 crore to the Kingfisher.

"We have said it before that banks will decide that (pumping in money). Government is not going to interfere in it. Banks have to follow RBI guidelines. They have to worry about their NPAs (non-performing assets). They 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.

State Bank of India Chairman Pratip Chaudhuri said business ethics barred him from sharing client confidentiality. Chaudhuri said this in reply to a question whether the bank had extended any new line of credit to the Kingfisher.