M A I N   N E W S

Opposition to govt bailout for ailing Kingfisher mounts
Sanjeev Sharma & Shiv Kumar/TNS

New Delhi/Mumbai, November 13
Although Civil Aviation Minister Vyalar Ravi today ruled out a government bailout plan for the beleaguered Kingfisher Airlines, he was evasive on the possibility of the government allowing foreign direct investment (FDI) in civil aviation.

Sources in civil aviation claim the government is in favour of limited FDI, which will enable foreign airlines to pick up stakes in Kingfisher and other airlines. But the CPM today opposed the proposal to open up the civil aviation sector and warned that it would lead to the taking over of domestic airlines by foreign carriers.

The government’s bailout plan, however, is running into stiff opposition not just from political parties, but even from doyens of the private sector.

One of the stalwarts of India Inc, Bajaj Auto chairman Rahul Bajaj today junked this idea and said the private sector should not be bailed out and “those who die must die”. Bajaj was reported as saying, “I am a proud private sector man and I don't see any logic of bailing out any private sector company either for the sake of employees or customers.”

Bajaj, known for being outspoken, has hit the nail on the head. There is a raging debate over the government’s keenness to provide a lifeline to a flamboyant and ostentatious liquor baron known for his Bangalore IPL team, Kingfisher calendar girls, F1 team, luxury mansions and yachts.

"If Bajaj Auto gets into a mess, would you (the government) bail me out?" he asked, adding, "If it's a free market economy, those who die must die."

Also, a bailout for a single company may penalise more efficient airlines like Indigo, which are doing relatively better in a difficult environment.

Mallya has tweeted that “is it Kingfisher’s duty to fly on loss-making routes?” It can be argued that nobody forced him to enter the business. Also, there is nothing strategic or critical about the services that Kingfisher provides that should force the government to hand over a bailout.

The airline has already shut down its low-cost carrier Kingfisher Red and is now only a full service carrier. The DGCA can distribute its slots if it does not want to fly to other airlines and enforce contractual obligations, including penalties.

No end appeared in sight for Kingfisher’s troubles as the airlines was forced to cancel 40 more flights on Sunday.