Govt Should Bail Out Kingfisher Airlines, Says ASSOCHAM
By IBTimes Staff Reporter | November 27, 2012 12:22 AM EST
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has demanded that the government rescue the debt-ridden Kingfisher Airlines in the same way that Air India was bailed out when it met with similar crisis.
Kingfisher flights were completely grounded since October 1, following a strike by the airline's engineers and pilots over non-payment of their salaries since March this year.
Welcoming Life Insurance Corporation of India (LIC) and Employee Provident Fund Organisation (EPFO) subscribing to Rs 7,400 crore debt issue of Air India as part of the government's bailout plan for the state-owned airlines, the ASSOCHAM has demanded a similar bailout for the Kingfisher Airlines.
"While Air India deserves to be given a bailout package, there is no reason why Kingfisher Airlines should be treated differently when it comes to lending agencies, banks and even the government organizations," said Mr Rawat, ASSOCHAM Secretary General, in a statement.
Of Rs 7,400 crore issue, the LIC is subscribing Rs 3,000 crore and EPFO Rs 4,400 crore. On its part, the government has announced Rs 30,000 crore bailout plan to revive Air India.
The Vijay Mallya-owned carrier is encumbered with a loan amount of ₹70 billion in 17 banks and has most of its bank accounts frozen, causing disruptions in flight schedules. The total debt load reportedly stands at $1.4 billion.
"Both private and the public sector companies operate in a similar environment. As the largest shareholder, it becomes incumbent on the Government to safeguard its PSUs. But at the same time, the banks and other financial institutions should not discriminate against the private sector firms. To the extent additional equity from the main promoters, the UB group is required, we would urge them to bring in these funds so that the lenders' comfort level is increased," the apex chamber said in a media statement.
Kingfisher Airlines has not started its operation in spite of resolving the problem with its striking workers last month, as the Directorate General of Civil Aviation (DGCA) has not given the green signal to begin operations.
To contact the editor, e-mail:
Most Popular Slideshows
- Flight MH17 Attack: Russians Claim 'Putin A Terrorist,' Memorial at Dutch Embassy Overflows [PHOTOS]
- Pope Francis Meets Sudanese Woman Who Was Spared Death for Apostasy (PHOTOS)
- Ellen DeGeneres Caught Cheating with Mutual Friend Before Portia de Rossi’s Rehab – Reports [PHOTOS]
- Typhoon Matmo Leaves 32k Customers w/o Electricity in Taiwan, Weakens After Landing in China
Join the Conversation
- Malaysian Airlines Flight 17: Air Carrier Losing $1.6 Million/Day; Crisis Management Experts Suggest Hiring Risk Expert as CEO
- Biggest Australian IPO in 4 Years as Healthscope Could Raises $2.12 Billion
- CBA, NAB, Westpac in Fixed Rate War Offering Below 5% Interest
- MH17: ‘Trademark Trolls’ Make Profit Out of the Tragedy
- Radio Australia Cuts to Affect Isolated Vanuatu Residents Who Rely on It for Weather Bulletins
- Windows Phone 8.1 Update Rollout: 20 Nokia Lumia Phones Eligible and 13 New Features to be Added
- HTC Google Nexus 8 Release Date Imminent with New Nexus 7 Deals, Two New Tablets Soon
- iPad Air 2 Release Date Will Skip IGZO Panel; To Rollout with Super-Slim iPad Mini Air
- HTC One E8 (Plastic Variant of HTC One M8) with 5-Inch Display, Dual-SIM, 801 Processor and 2 GB RAM to Hit New Markets Soon
- iPhone 6 Release Date in September 26 with Price Details and More Killer Features
- Apple iPad Mini Air: Three Fresh Features on the Smart Tablet to Wait for
- 4.7-Inch iPhone 6 Release Date is Sept 26 after iOS 8 GM Public Debut on Sept 17 – Reports