Mumbai: Rich, famous and well-connected may not be enough for liquor baron Vijay Mallya to rescue his Kingfisher Airlines.
Tax authorities have frozen its bank accounts. Most of its fleet is grounded. Staff haven't been paid since December, and Civil Aviation Minister Ajit Singh has threatened to shut it down if it can't meet safety and financial viability standards.
The airline needs a white knight investor - urgently - if it is to survive in its current form.
"Kingfisher's survival depends on the equity infusion. Everything depends on that. If he (Mallya) can't get that then everything will fall apart," said an executive at a state bank that considers its loan to Kingfisher non-performing, a classification Indian lenders make reluctantly. The executive did not want to be named as he is not authorised to comment on individual client issues.
While Mallya shoulders plenty of blame for Kingfisher's crisis, a harsh regulatory environment and taxes that make jet fuel more expensive than just about anywhere else also hurt.
The demise of Kingfisher would benefit rivals such as top-two carriers Jet Airways and IndiGo, and fares have indeed risen since Kingfisher started grounding its planes.
21/03/12 Reuters/Business Standard
0 comments:
Post a Comment