Civil aviation minister Vayalar Ravi ruled out a public bailout Ior India`s KingIisher Airlines or

any other airline, urging private airlines in India to put their own house in order.
Cash-strapped KingIisher Airlines, the country`s No.2 air carrier by market share, saw its
quarterly loss double and cancelled scores oI its Ilights this week.
'There is no bailout scheme or plan by the government Ior any oI the private airline beIore me,
Ravi said during a private visit to Sharjah in the United Arab Emirates.
Reports this week said that the government had decided in principle to allow Ioreign airlines to
own up to 24 percent oI Indian carriers, a move that could throw a liIeline to KingIisher and its
struggling rivals such as Jet Airways and SpiceJet.
'There is a representation by many institutions and people Ior some kind oI FDI. But the
government has not taken a decision on it. It all depends on the Iinancial policies, Ravi said.
Cash-strapped KingIisher Airlines, the country's No.2 air carrier by market share, saw its
quarterly loss double and cancelled scores oI its Ilights this week. Reuters
KingIisher chairman Vijay Mallya, the liquor tycoon who owns a cricket team and a Formula
One racing team, has said the government should allow Ioreign airlines to buy stakes in Indian
carriers.
But Ravi said managements have the main responsibility Ior the health oI their investments.
'In totality the managements should also be very careIul.
When asked iI KingIisher Airlines was mismanaged, he said: 'That is Ior him (Mallya) to decide
whether he managed it properly or not. II mismanaged, he will pay a heavy price.
Industry executives have blamed KingIisher`s problems on various Iactors including its purchase
oI a low-cost carrier and a mixture oI weak oversight and diIIerent Ileet types, which are most
costly to operate.
FUEL, SALES TAX HIT PROFITS
KingIisher`s competitors such as private carrier Jet Airways, budget airline SpiceJet and the
national carrier Air India have all been Iacing losses in the Iace oI rising Iuel costs and sales tax
by state governments.
The Centre Ior Asia PaciIic Aviation has Iorecast a record $2.5 billion to $3 billion loss Ior
Indian airlines Ior the year ending March 2012, with state-run Air India alone likely to account
Ior more than halI oI it.
'In India, the problem is the sales tax. Every state is making a major income Irom it Ior their
exchequer. I requested chieI ministers not to do that. Only two or three states including Kerala
and Andhra Pradesh reduced it, Ravi said.
The Iragility oI India`s Iast-growing aviation sector weighed on the Dubai Air show despite more
than $62 billion in total civil aerospace and deIence orders.
'I am beginning to become seriously worried, but so Iar we are just watching to see what
happens, a senior executive with a supplier to the Indian aviation market said.
Another said it could take about $400 million dollars Ior KingIisher to be rid oI investor
anxieties but that there was no sign oI leasing companies or creditors reclaiming aircraIt.
But another oIIicial with business links with the company said reckless press coverage was
aggravating the situation and predicted KingIisher would pull through.
None oI the executives agreed to be quoted because oI the matter`s sensitivity.
Planemaker Airbus so Iar appears to be supportive oI the company aIter KingIisher`s Mallya said
they had agreed to postpone delivery oI 5 A380 superjumbos to a yet unspeciIied date. AircraIt
have to be paid Ior on delivery.
'Fuel price is the major issue beIore us. We are trying to represent this matter on how to get over
this crisis. Air India also has the same problem and we are under discussion on how to get over
that.
Despite the country`s proximity and strong business links, Indian airlines did not have a strong
presence at the Dubai air show, although Jet Airways Iounder Naresh Goyal paid a visit and
toured the Boeing 787 Dreamliner oI which his airlines has 10 on order.
Driven by liberalisation and the growth oI middle classes, India is nonetheless a big part oI the
growth story touted in Dubai this week despite economic malaise in the West.
ManuIacturers and suppliers in Dubai expected this growth to continue almost unabated despite
the economic crisis in developed markets.