Crippled Kingfisher pleads with ministry for help
10 January 2012
Cash-strapped Kingfisher Airlines has told the country's aviation minister that it will not be able to maintain normal operations without a temporary bank overdraft, according to a report.
Kingfisher will require help to pay creditors to avoid having to ground aircraft, Vijay Mallya, chairman of the struggling carrier wrote to civil aviation minister Ajit Singh in a letter which Financial Express says it has seen.
"Our lessors have gone to court in London against non-payment of lease rentals. If we don't clear dues, our aircraft will be grounded," Mallya was reported as writing.
A Kingfisher spokesman declined to comment on the report when contacted by Reuters.
Singh said last week that the government will not cancel licences of cash-strapped carriers on safety concerns, and said that the ministry would provide help to the sector.
Kingfisher was forced to cancel hundreds of flights late last year and ground aircraft to conserve cash, and has been negotiating with banks for a further cushion to ease its debt burden and to raise working capital.
A government report last month said the total debts of India's airlines are expected to rise to $20 billion in the year ending March as they struggle with rising oil prices, high sales taxes on jet fuel and below-cost pricing driven by fierce competition.