Kingfisher: Mallya Questions Duty To Fly Unprofitable Routes

MUMBAI: Vijay Mallya, whose cash-strapped Kingfisher Airlines canceled scores of flights this week, drawing the ire of the government and travellers and spooking investors, questioned on Saturday whether it was the carrier's duty to fly loss-making routes.

He tweeted late on Friday night: "Every Government has gone out of the way to support Airlines and connectivity. In India Airlines are over taxed and over charged Wonder why?"

Shares in Kingfisher, the country's second-largest airline by market share, fell as much as 18 per cent to an all-time low on Friday as investors fretted about the viability of the carrier, which acknowledged it had been late in paying salaries in recent months.

In another post, the Kingfisher Airlines chairman said, "Is it Kingfishers duty 2 fly on loss making routes when State Governments tax heavily? Or should v be financially prudent n fly profitably?"

Late on Friday, Kingfisher said it was dropping unprofitable routes and speeding up a fleet reconfiguration, which would see its daily schedule of flights drop to 300 from 340. It recently said it was exiting the low-fare segment of the business, Reuters reported.

The carrier, whose share price has dropped 70 per cent in 2011, bringing its market capitalisation below $200 million, also said on Friday it "does not see any risk to its future or long-term viability".

Aviation minister Vayalar Ravi said he would approach the finance minister to seek emergency bank assistance for troubled airlines.

Kingfisher said it had not sought a government bailout. India's mostly loss-making airlines are struggling amid fierce competition and high sales taxes on aviation fuel despite passenger growth of about 19 per cent this year.

The Centre for Asia Pacific Aviation has forecast a record $2.5 billion to $3 billion loss for Indian airlines for the year ending March 2012, with state-run Air India alone likely to account for more than half of it.

On Friday, private carrier Jet Airways and budget airline SpiceJet reported losses for the September quarter, compared with profits in the year-earlier period. Kingfisher has never made a profit.