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Kingfisher crisis: 'Is it our duty to fly on loss-making routes,' tweets Vijay Mallya

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New Delhi: Hours after the government made it clear that a debt recast like was done for Air India was not possible for Kingfisher, the airline's owner and liquor baron Vijay Mallya tweeted, "Is it Kingfisher's duty to fly on loss-making routes when state governments tax heavily? Or should we be financially prudent and fly profitably?"

In another post that came in minutes after the first one, Mr Mallya seemed unhappy over the taxes. "Every government has gone out of the way to support airlines and connectivity. In India, airlines are over-taxed and over-charged. Wonder why?" he said in the tweet.

Cash-strapped Kingfisher Airlines has been in the news for numerous flight cancellations in the past few days. Over the last four days, it has grounded more than 120 flights. On Friday, at least 40 flights were cancelled and scores of pilots and other ground-staff called-in sick.

Kingfisher says flights had to be cancelled because of route rationalisation and due to the airline's efforts at improving productivity. In a statement, the airlines said, "As per the revised schedule, it will offer 300 daily flights connecting 54 cities as compared to its previous schedule of 340 flights."

"Kingfisher has been in business for six years and it will continue to be around. There is no doubt in our mind as a management team or Dr Mallya as a promoter of the airline about the credibility or the future of the airline," Kingfisher's CEO Sanjay Aggarwal said.

Sources say the airline has sought Finance Ministry's help on its loans. But the airline maintains it hasn't asked for a government bailout; it says it has asked banks to increase limits in order to meet escalating operations costs.

Civil Aviation Minister Vayalar Ravi said on Friday that "There is no package and government of India has no plans for a package. He (Vijay Mallya) did not ask for a package. But this is one of the major airlines and the government did not want to see it close down. I hope the banks will come forward. We will talk to them." He said he might speak to banks for the airlines and added that he had spoken to Finance Minister Pranab Mukherjee and Oil Minister Jaipal Reddy after Mr Mallya spoke to him seeking help.

The Directorate General of Civil Aviation (DGCA) has issued a notice under Rule 140(A) of the Aircraft Rules, 1937, asking Kingfisher why it had not taken the regulator's prior approval to curtail its flight schedules as required by this rule. It has also sought to know whether the airline had taken any step to facilitate the passengers inconvenienced by the cancellations.

Mr Mallya is said to have spoken to the DGCA on Thursday. He reportedly assured the DGCA that the airline is working out a contingency plan to minimise passenger inconvenience in the coming months. The airline says passengers are being informed via mails about recent developments and changes. It, however, stresses that "reports about flights being cancelled owing to the supposed exodus of pilots appears to be falsified."

Meanwhile, all the oil marketing companies - Hindustan Petroleum Corporation Limited, Indian Oil Corporation and Bharat Petroleum Corporation Limited - have denied extending credit line to the airline and asked it to pay for lifting jet fuel on a daily basis.

Sources have said that the Delhi International Airport (DIAL) and the Airports Authority of India have threatened to impose cash-and-carry on the airlines, which means the company will not get any more credit and will have to pay for use on a daily basis. Kingfisher owes about Rs. 220 crore to Airports Authority of India alone.

Shares of Kingfisher Airlines touched an all-time low on Friday before settling sharply down by over 9 per cent as the cash-strapped company continued to face serious financial turbulence. Kingfisher shares settled at Rs. 19.65, down 9.45 per cent.

In the process, the company's market capitalisation eroded by Rs. 102 crore to Rs. 978 crore from Rs. 1,080 crore as on Wednesday. The airline has suffered a loss of Rs. 1,027 crore in 2010-11 and has a mounting debt of Rs. 7,057.08 crore.

Read more at: http://www.ndtv.com/article/business/kingfisher-crisis-is-it-our-duty-to-fly-on-loss-making-routes-tweets-vijay-mallya-149106?pfrom=home-lateststories

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