Kingfisher finds a saviour in Manmohan Singh
14 Nov 2011
New Delhi: With questions being raised about the government's sudden enthusiasm to bail out financially stricken private airline Kingfisher, and civil aviation minister Vyalar Ravi cooling off in his support for the move, after receiving criticism from professionals and politicians alike, it was prime minister Manmohan Singh's turn to play saviour when he gave an assurance on Saturday that the government would find ways to get Kingfisher Airlines out of the trouble.
Ravi hurriedly clarified late on Friday evening that there would be no government attempt to ''bailout'' Kingfisher, after announcing in the morning that he had asked the finance ministry to ask banks to facilitate a restructuring of Kingfisher's debt.
Ravi's enthusiasm cooled off Friday evening following full-bodied criticism by both the Congress and the BJP, as well as industry circles, of any move by the government to bail out Kingfisher. All concerned said it was a private airline's to find ways to remain viable and the airline should shut down if it failed to sustain itself.
Striking a contrarian note on board Air India One, Singh, on his way back home from Maldives, said though the private sector should be more efficient, his government would try to find ways to get Kingfisher out of trouble and that he would speak to Ravi about this issue.
Even as Kingfisher continued to cancel services across the country, CEO Sanjay Aggarwal confirmed the airline had asked the banks for an increase in limits due to significant increase in operating costs caused by increase in fuel prices and rupee devaluation.
Lenders, meanwhile, began deliberations to consider if the struggling airline's debt could be restructured. According to industry estimates, a consortium of banks, including the SBI, ICICI, IDBI and Punjab National Bank, have an exposure of Rs7,700 crore to the airline.
The airline has suffered a loss of Rs1,027 cr in 2010-11 and its debt stands at about Rs7000 crore.
