New Delhi: The Kingfisher Airlines board is holding an internal meeting as the crisis concerning the airline refuses to end. The board is expected to explore ways out of the financial turmoil during the meeting.
According to reports, the board is likely to look at options of selling property, converting loans from its parent company into equity, and changing the terms under which it leases aircraft.
The airline has cancelled 200 flights in the past one week.
The meeting has been called even as the government remains non-committal on the issue of allowing direct investment by foreign airlines in the aviation sector.
Meanwhile, the opposition parties – the Bharatiya Janata Party (BJP) and the Left – remain opposed to any government bailout package to help the cash-strapped airline.
Even business leaders appeared not to be in support for a bailout for Kingfisher. Rahul Bajaj, the outspoken chief of Bajaj Auto, spoke on the crisis at the India Economic Summit in Mumbai.
He said, "If Bajaj Auto gets into a mess, would you bail me out? If it's a free market economy, those who die, must die."
Reacting to the opposition, Kingfisher chairman Vijay Mallya lashed out at those calling the need for financial aid a 'bailout'.
He posted a tweet saying, “Why do you say bail out? There's no bail out involving tax payers money. We want working capital management assistance.”
Referring to the statement of Prime Minister Manmohan Singh that he would explore ways to help the cash-strapped airline, Mallya said that Singh understood the importance of the issue.
He posted another tweet saying, “The Hon'ble PM is an economist and understands the importance of connectivity that goes together with economic growth. Why such debate then?”
The Prime Minister had said that his government would find ways to help the ailing aviation industry.
Sources told CNN-IBN that Union Finance Minister Pranab Mukherjee would be consulted on a package for Kingfisher airlines.
Mistakes committed by Kingfisher:
Here are some of the possible decisions and factors that led the Kingfisher Airlines into the crisis.
– It borrowed heavily to fund loss making airline and fell into a debt trap.
– It bought new aircraft when the industry suffered from heavy capacity.
– Kingfisher was blinded by a desire to overtake Jet Airways and become the king of skies.
– Focusing in flamboyance, it ignored the low cost airline model.