Bailout needed for aam admi, not for airlines: BJP
"The problem with Kingfisher airline is due to its own mismanagement. There are some airlines which are making profits while some are running losses. But government is not required to bail out the loss making units," Bhartiya Janta Party (BJP) spokesperson and former aviation minister Shahnawaz Hussain told PTI.
He also insisted that Kingfisher Airlines does not need a bailout from the government. "A bailout is needed for the aam admi (common man) who is bearing the brunt of huge corruption and price rise under the UPA(United Progressive Alliance) government. But it appears the government is more keen on bailing out an airline and not the common man," Hussain said.
Aviation Minister Vyalar Ravi had indicated that the government may explore ways to help Kingfisher Airlines.
Friday, BJP leader Yashwant Sinha had also said there was no ground for the government to help the ailing airline. "There is no case for a government bailout. Kingfisher Airlines can merge with another airline, or sell-off or whatever…," Sinha had said. He insisted that the pre-liberalisation practice of the government taking over a sick private sector unit and running it at a huge loss to the exchequer has been given up.
Kingfisher officials were Saturday closeted with their legal and financial advisors and its lenders began deliberations to consider if the struggling airline`s debt could be restructured. Overall, banks, including SBI, ICICI Bank, IDBI Bank and Punjab National Bank, have an exposure of Rs 7,700 crore to the airline.
Kingfisher is understood to have sought about Rs 300 crore of funded limit and a similar amount to secure Letters of Credit and bank guarantees. It is also believed to be seeking soft payment options from oil companies for jet fuel.
The stocks of the airline had on Saturday plunged to an all-time low to 19.1 per cent in early trading on the Bombay Stock Exchange to a record low before recovering to 9.45 per cent. The airline has suffered a loss of Rs 1,027 crore in 2010-11 and has a mounting debt of Rs 7057.08 crore.
The beleaguered carrier sent an email to its frequent flyers explaining the reasons for mass cancellation of flights. "We have decided to focus on the full-service market; to this end, Kingfisher Airlines has initiated reconfiguration of its aircraft. This exercise will require few of our aircraft to be out of service for the next few weeks. In line with maximising productivity, we have rationalised our network, resulting in a temporary discontinuation of approximately 50 flights out of our current operating schedule of approximately 350 departures per day. Once the reconfiguration is complete, these aircraft will be pressed back into service immediately" the email said.
Aviation regulator DGCA asked the carrier to give details of their plan to reconfigure its fleet to prevent a large-scale flight disruption as it had found that Kingfisher was not operating flights as per the approved winter schedule.
DGCA chief E K Bharat Bhushan also warned that if the airlines were found not operating the slots allotted to them, these will be given to others who are willing to operate "regardless of who it is".