Can't close down Kingfisher because of losses: Ajit Singh

**New Delhi:**Beleaguered Kingfisher Airlinescannot be closed down just because it is making losses andbanks are not helping it out with funds, Civil AviationMinister Ajit Singh said today.

“You can’t close down a company because they are makinglosses or banks are not giving them money. As long aspassenger safety is not jeopardised, as long as they keeptheir schedule, why should we close down any industry,” CivilAviation Minister Ajit Singh told reporters here.He was responding to a question on whetherthe Government would take stringent action against theairline if it flouted rules.

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His comments come at a time when the Vijay Mallya-owned carrierwas asked by its bankers to infuse fresh equity on its ownbefore they lent it additional funds.Bank chiefs have been quoted as saying that Kingfisherwould need to arrange fresh equity of Rs 1,000-2,000 crorebefore seeking additional funds from the consortium of banks,led by the State Bank of India.

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To another question, the minister said that closing down ofany airline would impact passengers.He said Kingfisher has submitted a new schedule of its

flights to the Directorate General of Civil Aviation (DGCA), which would closely monitor it.

A consortium of 18 banks, comprising 14 state-owned andfour private banks, have provided huge sums to the cash-strapped airline, which has a total debt of about Rs 7,057crore and accumulated losses of about Rs 6,000 crore.

The banks are expected to hold meetings with the ReserveBank of India (RBI) on the financial mess facing the airline as itsloans are reportedly turning to non-performing assets in thepast weeks. They are expected to take a call on whether ornot to extend fresh credit line to the ailing carrier.

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Kingfisher’s net loss shot up to Rs 444.26 crore for thequarter ending 31 December 2011 from Rs 253.69 crore in theOctober-December quarter of the previous fiscal. It hassuffered a loss of Rs 1,027 crore in 2010-11.

The ailing carrier has been put on cash-and-carrymode by the Airports Authority of India (AAI) as well as theoil companies for airport charges and jet fuel supplies.

Compounding its troubles, the excise authorities havefrozen the bank accounts of the carrier for its failure to payservice tax dues of about Rs 35 crore. The Income Taxauthorities had earlier frozen Kingfisher’s accounts.

As per its new schedule, Kingfisher is now operatingabout 170 daily flights against over 400 it sought permissionfor in November. It would not be operating direct flights tosome major cities and several Tier-II cities from now on, as perthe truncated schedule it has submitted to the DGCA.

The airline has also informed DGCA that it would striveto bring into service, in the next week or 10 days, 16 moreplanes in addition to the 28 it has promised to the regulatorthat it would operate. Of the 64 aircraft fleet, 28 are now

operational.

Due to its truncated flight schedule, the airline islikely to lose several prime flying slots.

PTI