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Corporate Nov 27, 2012

No birthday surprises from KFA for Mallya this December

By Firstbiz Staff

Kingfisher Airlines officials are unlikely to be able to give their chairman the gift that they have been aiming to give this year as the airline is yet to sort out scores of regulatory issues, which is imperative for it to resume operations.

Even though the airline is making all efforts to ready its revival plan by the end of this month, all hopes of restarting operations in winter may be shattered.

Media reports said the airline officials wanted to ready the airline so as to resume it operations by 18 December, Vijay Mallya's birthday.

AFP

Earlier aviation regulator DGCA had said that if Kingfisher's revival plan is found satisfactory, it will be allowed to fly. However, a Times of India report said today that restarting operations this winter has been ruled out and the airline can expect to fly again only from next summer.

After inking the United Spirits deal with Diageo, Mallya met aviation ministry officials on Monday with hopes to revive the airline. Sources told Firstpost that post the deal, Mallya has already pumped in Rs 550 crore into his pet Formula One, while Kingfisher is still waiting for his kind attention. The aviation ministry is still hopeful of reviving the airline but has not set any definite timelime.

Meanwhile, the Associated Chambers of Commerce and Industry of India (Assocham) on Monday called for a financial help to Kingfisher Airlines,similar to the oneextended to state-owned Air India.

Pointing out that Life Insurance Corporation of India and Employees Provident Fund Organisation have both subscribed to the over Rs 7,000-crore debt issue of Air India as part of the bailout package, the apex chamber has called for similar treatment for the private-owned airline.

"Both private and the public sector companies operate in a similar environment. As the largest shareholder, it becomes incumbent on the Government to safeguard its PSUs. But at the same time, the banks and other financial institutions should not discriminate against the private sector firms. To the extent additional equity from the main promoters, the UB group is required, we would urge them to bring in these funds so that the lenders' comfort level is increased," the apex chamber said in a media statement.

Interestingly, the demand comes even as Kingfisher has an aggregate exposure of over Rs 7,000 crore to various public sector banks.

by Firstbiz Staff

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