Also on Wednesday, the Director General of Civil Aviation (DGCA) met with aviation minister AJit Singh to apprise him of the latest situation following the meeting, Singh reiterated that the government would not interfere in any bailout packages by banks and that passenger safety continued to be its "prime concern".
“Banks are going to take their own decision,” he said, adding that, being under the Reserve Bank of India, they would have to follow their own rules. Earlier, too, Singh had ruled out a government-sponsored bailout for the privately-owned airline.
Kingfisher Airlines on Wednesday grounded another 20 flights, including 14 from Mumbai and 2 from Delhi, continuing a spate of cancellations that has stranded passengers across the country.
Lending their voices to the beleaguered airline, Singh and Corporate Affairs minister Veerappa Moily have said that the airline should not close down.
Here are the 10 latest developments in the Kingfisher Airlines’ saga:
1) The State Bank of India, India's largest bank by assets as well as Kingfisher Airlines’ largest lender, at Rs 1400 crore, is ready to provide a Rs 1200 crore relief package to Kingfisher, according to reports. Of this, nearly Rs 700 crore will begin working capital loans. SBI has denied comment. “Cannot comment due to client confidentiality,” SBI Chairman Pratip Chaudhuri told NDTV Profit. Read: SBI could bail out Kingfisher
2) The package is likely to include bank guarantees and loan repayment extension, sources said.
3) Meanwhile, national carrier Air India has decided not to carry passengers affected by Kingfisher flight cancellations, news service Reuters said on Wednesday, citing sources.
4) Singh said that the company has not communicated anything to the aviation ministry or to the sector's regulator DGCA on the funding approval yet. He said that the airline should not shut down. It should mobilize resources and stay afloat, Singh said.
5) Corporate Affairs minister Veerappa Moily who is also from Karnataka, where Vijay Mallya's United Breweries group is based, has also thrown his support behind Mallya and Kingfisher Airlines, saying that he would work closely with the finance ministry to help.
6) Until Tuesday, a consortium of 18 banks, led by SBI, that have lent to Kingfisher had refused to convert any more loans into equity. Kingfisher declared losses of Rs 444 crore in the quarter ended December 2011, up from 254 crore a year ago. Kingfisher's current debt is close to $1.3 billion or Rs 7,057.08 crore.
7) Kingfisher Airlines cancelled about 20 flights on Wednesday. Over the last five days kingfisher has cancelled multiple flights leaving passengers stranded at airports across India. Yesterday, Sanjay Agarwal, Kingfisher CEO met with the aviation regulator director general of civil aviation Bharat Bhushan to explain the flight disruptions and to discuss revised flight schedules.
8) The DGCA on Wednesday also briefed Civil Aviation Minister Ajit Singh on its discussions with the airline management and future plans to restore its services. The airline is expected to submit a fresh flight schedule to the DGCA which had asked it to come up with a "realistic" schedule which can be operated by 28 out of its 64 aircraft. The cash-strapped carrier has been operating only 28 of its 64-strong fleet after income tax authorities froze its bank accounts due to non-payment of dues
9) Reports said that the airline was partially restoring its operations from Kolkata especially flights from there to the Northeast. All operations from Kolkata were shut down starting Friday night. The DGCA chief had yesterday said that the airline will have to file a new schedule instead of a truncated one in the next 24 hours.
10) The consortium of lenders has not yet agreed to extend further loans to the carrier, said Reuters, citing three banking sources. Senior executives of Punjab National Bank (PNB), IDBI Bank and Bank Of Baroda, which between them have lent about Rs 2,000 crore to Kingfisher, have not yet reached any deal to lend more to the carrier, Reuters said. The executives did not want to be identified as they are not allowed to speak about individual clients.