Civil Aviation Minister Ajit Singh today said that the government will not put any pressure on banks to bail out debt-laden Kingfisher Airlines.
“If the banks seem some promise in their business plan then they will lend them money and we will welcome it,” Singh said.
Screengrab from CNN- IBN
He said it was up to banks to decide whether they could lend money to the troubled airline under RBI norms.
The minister also ruled out the DGCA shutting down the airline.
“The closing down of any airline will only cause more problems,” Singh said.
“Our priority now is that whatever flights they are still operating, the passenger safety should not be compromised. We are not going to bailout Kingfisher but we hope it can mobilise resources or deposits. If they don’t, there will be more problems for passengers,” the minister said.
Reports said that SBI, the biggest lender in the consortium, would turn benefactor once again for the stricken airline. Investors did not take the news well and the stock was down around three percent on the Sensex.
After yesterday’s meeting with the DGCA, Kingfisher started four flights from Kolkata to the North East today.
However, flight cancellations in other cities continued with 14 flights being cancelled in Mumbai and four in the Delhi.
Sources have also told CNBC-TV 18 that the Income-Tax department may de-freeze Kingfisher’s bank accounts after the airline agreed to make part payment of its dues.
The carrier is slated to pay Rs 43 crore service tax dues by March 2012 and owes as much as Rs 53.8 crore for financial year 2011 to the I-T department and Rs 100 crore for financial year 2012.
