Will not shut down Kingfisher, swears Mallya
Kingfisher shares plunged as much as nearly 20 percent on Tuesday ahead of a meeting between the airline's top executives and the country's aviation regulator.
Reacting to the ongoing Kingfisher crisis, chairman and promoter Vijay Mallya said he will not shut down the carrier as long as he gets help from the banking system. He added that closing down is not an option as it is not in 'national interest'.
"Why should we give up as long as we get help? Help is not bailout. We have asked banks to consider our proposal to provide more working capital."
"We have asked banks to consider our proposal to provide more working capital," he said, making it clear that the airline has never asked for a bailout from the government. In the context of getting help, the liquor baron referred to the government's decision to allow direct jet fuel imports by the airlines and permit foreign carriers to pick up stake in them.
Kingfisher shares plunged as much as nearly 20 percent on Tuesday ahead of a meeting between the airline's top executives and the country's aviation regulator. On Monday, the debt-laden airline cancelled over 50 flights, of which 16 were out of Mumbai alone, said media reports.
Moreover, Mallya blamed the income tax officials for the sudden disruption in flights. When asked as to why he did not inform DGCA about the flight cancellations he said that the company's bank accounts were suddenly frozen by the Income Tax department over non-payment of dues and that the airline did not have time to notify DGCA. "The abrupt disruption was unfortunate because our bank accounts were suddenly frozen by tax authorities. I don't deny we have taxes due. .... The bottomline is we requested for time to pay these dues," Mallya said.
Earlier civil aviation minsiter Ajit Singh ruled out any bailout on the lines of the equity infusion into state-owned Air India. "The government can't give direct money to any private industry like Kingfisher," Singh said. The company will need to present its business plan to banks to get money. "Also, we cannot go around asking banks to lend money," Singh said
Kingfisher and other airlines have been under financial stress for quite some time," says the aviation minister. "But KFA did not inform the DGCA about flight cancellations as per rule," he said. The DGCA report on KFA cancellations is awaited.
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