Bailout for Kingfisher Airlines? BJP opposes any financial help

NEW DELHI: Civil aviation minister Vayalar Ravi on Friday said he would talk to Finance Minister Pranab Mukherjee to get financially-troubled Kingfisher Airlines assistance from banks.

The minister is also talking to state governments to reduce sales tax on aviation fuel, Ravi told TV channel Times Now.

Shares of the cash-strapped carrier slumped 18 percent to a life low on Friday as the airline continued to cancel flights and newspapers reported leasing companies were planning to take planes back and pilots were leaving.

Shares of Kingfisher Airlines touched an all-time low before settling sharply down by over 9 per cent as the cash-strapped company continued to face serious financial turbulence.

Kingfisher shares settled at Rs 19.65, down 9.45 per cent from the previous close on the BSE. During the day, the scrip plummeted 19.12 per cent to a lifetime low of Rs 17.55.

On the NSE, the stock closed at Rs 19.85, down 8.53 per cent from the last close.

In the process, the company's market capitalisation (m-cap) eroded by Rs 102 crore to Rs 978 crore from Rs 1,080 crore as on Wednesday.

Kingfisher Airlines has sought government help for a bailout even as it continued its flight curtailment exercise for the fifth consecutive day today.

Some 50 pilots and cabin crew did not turn up for duty by reporting sick as over 40 flights were cancelled across its network today.

DGCA has issued a notice under Rule 140(A) of the Aircraft Rules, 1937, asking Kingfisher why it had not taken the regulator's prior approval to curtail its flight schedules as required by this rule. It has also sought to know whether the airline had taken any step to facilitate the passengers inconvenienced by the cancellations.

Meanwhile, all the oil PSUs -- HPCL, IOC and BPCL -- have denied extending credit line to the liquor baron Mallya-owned airline and asked it to pay for lifting jet fuel on a daily basis.

The airline has suffered a loss of Rs 1,027 crore in 2010-11 and has a mounting debt of Rs 7,057.08 crore.

Meanwhile, shares of Vijay Mallya-led UB Group companies such as United Breweries (Holdings) and United Breweries, too, saw selling pressure and closed with a loss of 9.68 per cent and 2.03 per cent, respectively on the BSE.