Treatment should be similar to Air India, says chamber
The Government should provide a similar kind of financial help to Kingfisher Airlines as extended to state-owned Air India, the Associated Chambers of Commerce and Industry of India (Assocham) said on Monday.
Pointing out that Life Insurance Corporation of India and Employees Provident Fund Organisation have both subscribed to the over Rs 7,000-crore debt issue of Air India as part of the Government bailout package, the apex chamber has called for similar treatment for the private-owned airline.
LIC has subscribed Rs 3,000 crore and EPFO Rs 4,400 crore of Air India’s debt issue.
Kingfisher Airlines, which reported losses of over Rs 9,000 crore and debt of over Rs 8,000 crore, ceased operations on October 1.
“Both private and the public sector companies operate in a similar environment. As the largest shareholder, it becomes incumbent on the Government to safeguard its PSUs. But at the same time, the banks and other financial institutions should not discriminate against the private sector firms. To the extent additional equity from the main promoters, the UB group is required, we would urge them to bring in these funds so that the lenders’ comfort level is increased,” the apex chamber said in a media statement.
Assocham has argued that whether it is public or private sector money, the resources belong to the nation and should not be allowed to go down the drain.
“Satyam Computer is a shining example how the Government can effectively intervene and help revive an organisation irrespective of its ownership pattern,” the apex chamber has said.
The closure of Kingfisher has also led to a sharp hike in the air fares and untold misery for the airline employees who are finding it difficult to find other jobs due to the overall situation in the industry, Assocham said.