Kingfisher’s bad times: Govt says will help to save the day

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Mumbai, Nov 11, 2011: Turbulent times continue for the king of good times. Kingfisher Airlines slumped in trade today post the airline slashing about 80 flights and the aviation regulator pulling it up for withdrawing these flights.

Even as the aviation regulator DGCA cracks down on Kingfisher Airlines for withdrawing flights, the aviation minister said he will help the airline get back on its feet, reports CNBC-TV18 Mehak Kasbekar.

In what can be called a never seen before situation the aviation minister has said that he will help Kingfisher Airlines in whatever way he can. In fact, he went ahead and said that he doesn’t want the Airline to shut down.

This is the first indication on how serious the situation really is. The civil aviation minister, Vayalar Ravi has gone on record to say it doesn’t want the second largest private airline in India to shut down. He is going to speak to the finance minister to to request banks to help out with equity infusion in Kingfisher Airlines.

They are looking at fresh equity infusion in Kingfisher Airlines, which is something that he said he has spoken to the finance ministry on and of course as well as HPCL. Kingfisher has a lot of dues with HPCL, and aviation minister will speak to the Oil Minister sometime in the evening today or tomorrow to help extend another credit line for Kingfisher Airlines.

As a whole the aviation sector is suffering and the minister wants to speak to the government to relook at that tax structure on ATF. Air India, which is actually a PSU, has been suffering. However, we have seen the government step in and say that they really also want to help Kingfisher out, which wasn’t seen ever before. Kingfisher representatives will be meeting DGCA officials in the evening today.

Meanwhile, the aviation sector’s regulatory body DGCA has come down cracking as it send a notice to Kingfisher Airlines about two days ago, to which the airline is suppose to respond by the end of today. Two other notices were issued yesterday afternoon, one to Indigo Airlines and the other to SpiceJet. Each of them has cut back on 30 aircraft flights, according to DGCA’s notice. However, Indigo told CNBC-TV18 that not a single flight has been cut down.

Also, as the aviation sector enters the winter schedule when both leisure and business travel shoot up, the ticket prices too have gone up today, since airlines have cut down the number of aircrafts they are flying.

Courtesy: Money Control