No bail out request to govt: Kingfisher

Mumbai, Nov 12 (IBNS) Vijay Mallya-owned Kingfisher Airlines on Saturday said it has not made any bail out request to the government.

"Kingfisher has not made any bail out request to the government. We have only asked our banks for an increase in limits due to significant increase in operating costs caused by increase in fuel prices and rupee devaluation," said a statement issued by Sanjay Aggarwal, CEO, Kingfisher Airlines.

"Kingfisher has credit terms or payment arrangements with all its vendors which we are complying with."

He said: "There has been a few days delay for the last 2-3 months in payment of employee salaries. However, all employees have been paid in the month the salaries were due."

Aggarwal said the airline industry in India is going through a tough period due to high costs and lower yields.

"This is evident by the unprecedented losses recently reported. To counter these pressures and leveraging its strengths, Kingfisher decided to rationalize network, drop unprofitable flights and expedite its fleet reconfiguration. This initiative will improve the long term profitability of the airline," he said.

He further said the reconfiguration initiative will require up to 3 aircraft to be out of service over the next three months at any one time for this exercise to be completed.

"It will reduce the number of fleet configurations from 7 to 3, improving operational flexibility. This initiative will add more seats to the fleet, improving revenue production of each aircraft."

The Chief Executive Officer (CEO) said the actions over the last few weeks have been to implement the above strategy in a pre-determined and well-controlled fashion.

"Kingfisher Airlines has rationalized its network to offer maximum and seamless connectivity. As per the revised schedule, it will offer 300 daily flights connecting 54 cities as compared to its previous schedule of 340 flights.
"The revised schedule is being loaded in the system and guests can confidently continue booking Kingfisher flights," he said.

Aggarwal said: "Our guests remain our top priority. We reached out to all our guests who were booked on these cancelled flights to re-accommodate them either on our or other airline flights. We offered full refund to those who so desired. We apologize to the guests who might have been inconvenienced."

Refuting media reports, he said no Kingfisher flights have been canceled due to lack of pilots or other staff.

"The attrition of 100 pilots did not happen overnight. Kingfisher has sufficient number of pilots and a robust pipeline of new pilots to continue to operate its scheduled flights," he said.

"The CAR140 requires DGCA to be informed if there are flight cancellations for a longer period of time. While we were finalizing the plans, we only announced these cancellations until November 19th.

"We did not feel the need for informing DGCA. In hindsight, we should have informed them and we apologized to them for the same."

Aggarwal said Kingfisher does not see any risk to its future or long term viability.

"The whole Indian Aviation Industry is struggling due to high costs and lower yields. We are no exception. Like any other prudent business we are taking steps to improve our financial performance," he said.

Earlier on Saturday, Kingfisher Airlines chairman Vijay Mallya hit out at certain media outlets for supposedly spreading misinformation saying that the cash-drought carrier had never made a loan restructuring request to private banks nor had it asked the government for a bailout.

He said that an anchor on a national news channel and a newspaper owned by the same media group had incorrectly suggested that Kingfisher was looking for a government bailout or a debt restructuring from banks.

Tweeting hours after Civil Aviation minister Vayalar Ravi ruled out a debt recast for Kingfisher. like that was done for India's flag carrier Air India, the liquor baron also tweeted his apparent frustration at the government.

"Is it Kingfisher´s duty to fly on loss-making routes when state governments tax heavily? Or should we be financially prudent and fly profitably?," he said on his Twitter account.

"Every government has gone out of the way to support airlines and connectivity. In India, airlines are over-taxed and over-charged. Wonder why?" he tweeted.

Earlier, aviation minister Vayalar Ravi had said on Friday that Union Finance Minister Pranab Mukherjee might speak with the banks over a possibler bailout for Kingfisher but said that a debt recast was not possible.

Ravi said owner of Kingfisher aArlines, Vijay Mallya, had spoken to him for some help and hence he discussed the issue with Finance Minister Pranab Mukherjee and Oil Minister Jaipal Reddy.

Kingfisher Airlines have been passing through tough situation for quite some time now with the airlines losing nearly Rs. 1000 crore in the current financial year.

The airlines has to repay a bank loan of Rs 7,000 crore, media reports said.

The flight company has not made payments to the oil companies.

Earlier, aviation regulator Directorate General of Civil Aviation (DGCA) had sent a notice to Kingfisher Airlines, asking to give reasons behind the cancellation of at least 80 flights in the last three days.

Owned by Vijay Mallya, Kingfisher Airlines has been cancelling large number of flights in recent times.

The rule book states that airlines need to take the permission from aviation regulatory body DGCA before taking decision on rescheduling flights.

DGCA not only sent a notice to Kingfisher Airlines for explanations behind their decisions to cancel so many flights, but they also asked the company to think about compensating the passengers.

For the past few days passengers had been facing severe problems as Kingfisher cancelled the flights without giving any sort of notice, media reports said.

Several passengers had to pay extra amount and buy tickets in other flights as their scheduled flights were cancelled.