SBI has no plan to lend more to Kingfisher Airlines: Pranab Mukherjee

NEW DELHI: Kingfisher's troubles show no sign of ending in a hurry. Finance minister Pranab Mukherjee on Tuesday saidState Bank of India (SBI) has no plan to provide fresh loans to the cash-strapped airline as of now. In addition, aviation minister Ajit Singh also made it clear that the government cannot force banks to continue lending to anyone after a meeting with PM Manmohan Singh to discuss the problems plaguing India's aviation industry.

"SBI has informed that currently there is no such plan to provide additional loan to Kingfisher," Mukherjee told Rajya Sabha in reply to a query over SBI's reported plans to bail out the airline by giving a fresh loan of Rs 1,500 crore. The crisis-ridden airline has a debt of Rs 7,057.08 crore.

Mukherjee said that SBI, which leads the consortium of lenders to Kingfisher, has informed that, as of February, the airline's account is "sub-standard" with eight public sector banks and "standard" with five public sector banks. "The consortium agreed to 'holding on operations', whereby a portion of the credits into the account are appropriated for reducing irregularities in the accounts of banks," he said.

Meanwhile, Ajit Singh met the PM on Tuesday to discuss the threats the Indian aviation sector faces. The biggest issue is of high jet fuel prices due to a high base price and even higher sales tax rates levied by states. The minister is learnt to have stressed on the need to rationalize jet fuel prices in his meeting with the PM. Singh warned airlines against compromising with safety due to their financial stress and warned of strict action if anyone was found guilty of the same.The management of Kingfisher, whose flights are getting disrupted from Monday as several unpaid pilots are staying away from work, is speaking to employees on the issue. "We are sorting it out. We are facing a serious handicap as our accounts are frozen. We are not asking for a bailout from the government but hope for help from the banking sector to de-freeze our accounts," Kingfisher chief Vijay Mallya told reporters outside Parliament, while terming the current disruption "planned cancellations".

In a related development, Jet Airways said that it has worked out a payment schedule with tax authorities for pending service tax dues. "An amount of Rs 35 crore has already been received by the service tax department, and the balance Rs 35 crore will be paid in full on March 15, 2012," an airline statement said. 


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More Kingfisher flights cancelled as pilots stay away

MUMBAI/BANGALORE, MARCH 13: 

Twenty-two arrivals and 18 departure cancellations of just one airline at one airport on Tuesday. Things couldn't have gone worse for the 'King of Good Times'!

Flight operations of the beleaguered Kingfisher Airlines were further affected on Tuesday as more pilots did not report for duty to protest the delay in their salary payment.

At Bangalore, which normally sees 40-50 movements from Kingfisher on a day, there were very few take-offs or landings by the airline on Tuesday, said a spokesperson.

At least four flights that were scheduled to take off from Mumbai on Tuesday were cancelled. The domestic sectors affected due to the flight cancellations were Mumbai, Delhi, Bangalore, Ahmedabad and Hyderabad.

On Monday, nearly 50 flights were grounded after the pilots of the airline did not report for work. According to sources at various airports, the airline had cancelled 11 flights from Mumbai, nine from Delhi, five each from Kolkata and Bangalore, and two from Chennai.

The company in a press statement said it operated about 145 flights (out of its highly truncated daily schedule of almost 200 flights), while others were either combined or cancelled.

FARES FLY NORTH

With more flights getting disrupted, air-fares ruled high on Tuesday too. A Mumbai-based travel agent said that the air-fares on the Mumbai-Delhi sector were close to Rs 10,000 for the day, while the Mumbai-Bangalore seats were all sold out in the peak travel hours.

At Bangalore, a passenger found to his dismay that a Bangalore-Chennai air ticket for an afternoon flight came with a Rs 14,000-price tag for a journey scheduled for March 26.

A Bangalore-based travel agent said that the airline had lost almost 80 per cent of its market due to its turmoil in the past few months.

"It was in fact the most preferred airline a few months ago, but now passengers are hesitant to fly the airline due to these uncertainties," he added.

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British Airways, Kingfisher code share pact suspended

NEW DELHI, MARCH 13: 

In what spells more trouble for Kingfisher Airlines, its code-share agreement with British Airways has been suspended.

The agreement allowed passengers to book their journeys on each other's Web sites, earn frequent flyer points on the code-share routes and gain access to each other's airport lounges. The two airlines had signed a code-share agreement for each other's flights across India, Sri Lanka, the UK and continental Europe in September 2010.

Confirming the latest development, Mr Chris Fordyce, Regional Commercial Manager, South Asia, said British Airways customers booked to travel on an operating Kingfisher flight will remain unaffected. "Our customers booked to travel on a cancelled service will be able to rebook to an alternate service, where available, or claim a full refund," he added.

Travel industry sources indicated that the suspension of the agreement between the two airlines was probably because of the poor financial health of Kingfisher Airlines.

The airline, which saw its net loss swell by almost 75 per cent to Rs 444 crore for the quarter ending December 2011, was also recently suspended from the Geneva-based International Air Transport Association (IATA) for failing to meet its financial dues.

"With this suspension, Kingfisher loses an important sales channel for their domestic network. This has more implications for Kingfisher Airlines. British Airways has a strong partnership with other airlines and a good base in India," said Director, STIC Travel Group, Ms Richa Goyal Sikri.

The agreement saw British Airways' code being placed on 11 domestic Indian routes and one route to Sri Lanka operated by Kingfisher Airlines.

Kingfisher Airlines' code was placed on nine British Airways' routes from Heathrow to the UK region and to continental Europe.

NO FRESH LOANS: PRANAB

Meanwhile, in more bad news for the airline, the Finance Minister, Mr Pranab Mukherjee, told the Rajya Sabha that State Bank of India (SBI) has no plans of providing fresh loans to Kingfisher Airlines.

The Minister added that SBI, the leader of a consortium of lenders to the air carrier, had said that the airline's account was "sub-standard" with eight public sector banks (PSBs) and "standard" with five PSBs as on February 2012. The airline has a debt of Rs 7,057.08 crore.

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