We can’t ask Kingfisher to wind up: DGCA

Moily says can’t close down a firm; Singh says govt has to hear them out

Written by ENS Economic Bureau | New Delhi | Published:February 22, 2012 1:58 am

A day after Civil Aviation Minister Ajit Singh curtly ruled out any bailout for Kingfisher Airlines,the government seems to be veering around a view that the cash-strapped carrier cannot be allowed to go down the water.

The strongest voice of support to Vijay Mallya-owned Kingfisher came from Corporate Affairs Minister Veerappa Moily,who said that the government must “go up to the last point” to save the carrier. “As Corporate Affairs Minister,I am not in favour of closing down any company. We saved Satyam. But it was not about an individual,but about the company,” Moily told The Indian Express. He,however,said Mallya should bring “professional management and not personal management”.

In the last one week,around 50 pilots have quit the airline to join a budget carrier,as the airline struggles to clear staff salaries delayed for two months. Cancellations at Kingfisher continued with 35 per cent of the total 240 flights remaining grounded.

Singh,who on Monday said that the government would not ask any banks to bail out any private airline,today took a more lenient view. Echoing Moily’s views,he said: “We have to hear them out.” After a two-hour meeting with the airline’s top brass,the Director General of Civil Aviation EK Bharat Bhushan ruled out any punitive action against it for violating rules. “Such an action will only precipitate matters. They are among the largest airlines,and we cannot just ask them to shut down. I will have to consult the (civil aviation) ministry before initiating any such action,” he said.

It may be recalled that in November 2011,Prime Minister Manmohan Singh had said the government will “find ways to get Kingfisher out of trouble”. The airline had then suddenly cancelled a third of its flights in the first major sign of a prolonged trouble. The change in demeanour of the civil aviation ministry seems to have been influenced by a broad consensus within the government that prominent post-reform brands cannot be allowed to die.

“We don’t know what their plans are,how they are going to restore normalcy. Then there are safety issues which they have to answer,” Singh said. The DGCA asked Kingfisher to submit a “realistic” flight schedule within 24 hours,as it noticed fleet reduction from 64 to 28 aircraft.

Kingfisher’s problems compounded with the I-T department refusing to de-freeze its accounts. In the meeting,the airline blamed this as a reason for its inability to service damaged aircraft,reducing operational fleet. While turning down this plea,DGCA estimated that the airline would be able to operate 175 flights. Govt breaks logjam over 49% FDI in airlines Page 16

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