The civil aviation ministry has passed the request by ailing Kingfisher Airlines for a three-month credit for supply of jet fuel by oil marketing firms to the Prime Minister?s Office (PMO). The development signals that all decisions regarding the dues of Kingfisher will now be taken at the highest level in the government.
The civil aviation ministry forwarded Kingfisher?s request as part of its status report on the sector, which the PMO had sought post mass cancellation of flights by the airline.
?We have explained the reasons for cancellation of flights by Kingfisher to the PMO and also the reason why some other carriers IndiGo and GoAir were not utilising their slots. Apart from that we have apprised the PMO of the current financial health of Indian carriers,? a senior aviation ministry official told FE.
According to the Directorate General of Civil aviation (DGCA), domestic carriers are currently not utilising 180 slots for which they have permission to operate flights during the winter schedule. Kingfisher has been cancelling 50-55 flights every day maintaining it has pulled out three aircrafts from operation for re-configuring seats.
Kingfisher Airlines had last week asked the government to help it survive by ensuring three-months of credit period from oil companies IOCL, BPCL and HPCL. Kingfisher has been finding it difficult to pay for airport charges and fuel bills on the back of a severe cash flow crunch.
Kingfisher is in active discussion with its lenders like SBI, PNB and IDBI for enhancing working capital limit by R700-800 crore. Banks have attached any further short-term loan with the carrier?s ability to infuse fresh equity into the company.
The banks have already recast Kingfisher?s R7,057 crore debt easing repayment terms and lowering interest rate. The airline which lost R1,027 crore in 2010-11 has nearly doubled its losses to R469 crore in the quarter ending September 30.
Official sources said that civil aviation minister Vayalar Ravi along with secretary Nasim Zaidi may call for a meeting of CEOs of all scheduled carriers in the next few days to discuss the operating environment for airlines in the country.