Kingfisher has to be saved, says Veerappa Moily

PTI

New Delhi, 21 Feb 2012: Amid criticism from all quarters, beleaguered airline Kingfisher’s promoter Vijay Mallya today got some sympathy from Corporate Affairs Minister Veerappa Moily who came out in his support saying the carrier "has to be saved".

 

Moily, who was speaking on the sidelines of an Assocham event here, said Mallya has met him as both of them hail from Karnataka and that he should work out a strategy acceptable to the Finance Ministry.

 

"Of course he (Vijay Mallya) has met me because he hails from Karnataka... That (Kingfisher) has to be saved. He has to work out a strategy that will be acceptable to the Finance Minister and his ministry. He has a vibrant airline. And it has given excellent service... I wish him well," Moily said.

 

The airline, which has an outstanding debt of over Rs 7,057.08 crore (according to the latest figures), has requested the consortium of lenders, led by SBI, for a working capital support of Rs 200-300 crore.

 

On giving bailout to the carrier, Moily said: "As the Corporate Affairs Minister, we want corporate bodies to build and come up and not wound up... Something has to be done.

 

He (Mallya) has to work out a strategy... The entrepreneur has to take proactive measures so that is acceptable to banks and others".

 

Meanwhile, the cash-strapped carrier, whose bank accounts have been frozen for non-payment of taxes, virtually blamed the Income Tax authorities for the large-scale flight disruptions, saying freezing of the accounts had led to the curtailment in its services.

 

Trouble had started in Kolkata last Friday when the airline announced it would stop operations for four days, leading the employees at the airport to demand their salaries and finally staging a walkout, leaving passengers in the lurch.

 

Further, more than 20 flights were cancelled today. About 80 flights of the carrier from six metro cities did not operate yesterday leaving hundreds of passengers stranded.

 

The airlines has been rapped by DGCA for not adhering to its flight schedules but the aviation regulator made it clear there were no plans to take any punitive action against it for the moment.

 

The airline began cancelling its flights as it held talks with bankers to finalise a deal for funds. Kingfisher posted a Rs 444 crore loss for the third quarter.

 

The airline had sought permission to operate around 400 flights with 64 aircraft during the current Winter Schedule from November to March.