Asked if mismanagement was responsible for Kingfisher`s troubled times and that the carrier should be allowed to fly into the sunset, Moily told reporters on the sidelines of a function: "that`s not our (Government`s) desire; it (Kingfisher) has to survive".
"But the only question is, you know, he (Mallya) has to take some proactive interest; he has to manage it well", he said.
"The whole difficulty with some of our airlines is that they are not professionally managed, which include Indian Airlines and Air India. I think we need to work on these things", Moily, a former Karnataka Chief Minister, said.
Noting that IndiGo was making profits, he said other airlines have to learn a lesson from that carrier and "take it forward".
Moily said Mallya also met him and he suggested "somethings" to the Kingfisher Airlines Chairman. "He (Mallya) has to give a possible solution to bankers (the lenders) and also to others", he added.
The Vijay Mallya-owned airlines has a total debt of about Rs 7,057 crore and accumulated losses of about Rs 6,000 crore.
State Bank of India, the lead lender to Kingfisher Airlines, has said it would not consider any fresh loans for the debt-laden carrier until it raises new equity itself.
"Kingfisher has an outstanding service tax dues of Rs 70 crore and the company had promised to pay in instalments," Goel had said in New Delhi.
The beleaguered airline has been in a financial mess and is unable to meet its obligations, including paying salaries to its employees, for months on end now.
Following continuous non-payment of salaries, late last week a section of its engineers went on a `tools-down` protest for a day. This came even as airline chairman Vijay Mallya in an internal communication towards the middle of last week had promised to clear all the salary arrears at the earliest saying he had made arrangements for that.
As crisis deepened and salaries did not come by, its employees left the crippled organisation en-masse, especially the most critical pilots. Over 60 pilots have left so far in the past few months alone.
As pilots left and the cash flow turned dry, the airline massively reduced its flights beginning mid-October. From 400 flights a day, it is operating only 170 flights now, using just 28 of its 64 fleet.
The airline, which never made a profit since its inception in May 2005, reported a net loss of Rs 444.26 crore in the December quarter, due to high fuel costs and weaker rupee, up from Rs 253.69 crore a year ago.
The airline suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore in its books apart from over Rs 4,000 crore of accumulated losses and a restructured long-term loan of around Rs 7,000 crore.
The cash trapped airline has not been able to get fresh funding from banks, as a 19-member bank consortium is adamant that the promoters bring in at least 50 per cent of its fund requirement in fresh equity as a pre-condition for any new funds. The airline urgently needs at least Rs 2,000 crore working capital to remain afloat.