Two days after Kingfisher Airlines’ flying licence expired, Civil Aviation Minister Ajit Singh reiterated the need for the airline to convince the aviation regulator with a revival plan for renewal of its permit.
“If Kingfisher wants to fly again, they have to satisfy the DGCA,” Mr Singh told reporters on Wednesday.
The minister also stressed that no bank was willing to lend to the airline—which is already reeling under a massive debt of more than Rs 7000 and has accumulated losses of over Rs 10,000 crore apart from the salary dues of the past seven months—adding that a complete shutdown will cause collateral damage to many stakeholders. “(I) sympathise with (the) employees of Kingfisher.”
Lenders of the airline had last month met and were informed that the airline would infuse Rs 425 crore for restarting limited operations. The funding would be met by the company, and not by the State Bank of India-led consortium, sources had told NDTV.
Kingfisher Airlines had submitted a proposal on December 26 to the Director General of Civil Aviation (DGCA) after its license was suspended on October 20 following a strike by the airline’s pilots and engineers in September-end over non-payment of salaries for several months, grounding the airline’s entire fleet. However, the revival plan did not have a clear funding proposal, Mr Singh had said last week. Its permit was slated to expire on December 31.
The Vijay Mallya-promoted airline said that expiration of its operating licenses was not a cause for concern as the grounded Indian carrier had two years to renew the license and permits required to fly.
"Despite the impending expiry of its license tonight, there is no cause for concern as the regulations permit license renewal within two years of expiry," the company had said in a statement.
It also added that it was "confident" of securing approval from DGCA to re-start operations and that it was in the process of replying to concerns raised by the regulator.
Last month, Diageo Plc bought a majority stake in United Spirits, also a UB Group company, for $2.1 billion.
Mr Mallya had further said that he would handle the Kingfisher issue separately
“We have multiple businesses and each business operates independent of each other, there is no cross contamination with each other. I have done what is best for the beer business, now I have done what is better for the spirits business. Similarly, I will do what is best needed for the Kingfisher Airlines at the appropriate time,” he had said.
Kingfisher Airlines has been unsuccessful at raising fresh cash for more than a year. It has reportedly been in talks with foreign investors for capital infusion. The Centre for Asia Pacific Aviation (CAPA) has said a fully funded turnaround for Kingfisher would cost at least $1 billion.
Launched in May 2005 with great fanfare, the airline has not reported a profit ever.
With inputs from Agencies