Kingfisher crisis deepens; no bailout - Reuters India

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Kingfisher crisis deepens; no bailout - Reuters India

NEW DELHI |
Mon Feb 20, 2012 5:09pm IST

NEW DELHI (Reuters) - The Directorate General of Civil Aviation (DGCA) has summoned top executives of Kingfisher Airlines (KING.NS) to explain the large number of flight cancellations since Saturday, even as the aviation minister ruled out providing any aid to the loss-making carrier.

On Saturday, 32 out of the 240 flights that Kingfisher operates each day were cancelled and the situation was likely to continue for four days, the airline said in a statement.

"It is a very serious matter, we recognize it and DGCA has called Kingfisher to find out what's going on, what are their plans and why did not they anticipate the problems and inform DGCA before," Civil Aviation Minister Ajit Singh told reporters.

Kingfisher has so far failed in efforts to get fresh equity capital. Banks own about a quarter of its shares after the company's debt was restructured early last year.

State-run State Bank of India, the lead bank, has refused to lend further if the airline did not infuse fresh equity.

Singh said it was the government's responsibility to help national carrier Air India, but in case of private airlines such as Kingfisher, it was for the bank to make a call on providing fresh loans.

Kingfisher, named after the country's most famous beer, lost 4.4 billion rupees in fiscal third quarter that ended in December, and its bank accounts had been frozen by the tax authorities over outstanding dues.

"As far as private airlines are concerned, they are


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