Should the govt help ‘king of good times’?

GN Bureau | November 14, 2011



The king of good times is having bad times. Six weeks ago Kingfisher announced plans to recast its business model by doing away with its low-cost service. Last week, it 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. After the prime minister hinted at the possibility of “ways to help” the broke airline, which was not taken well in the media and industry, the government has ruled out a bailout package.

However, as the Kingfisher board meets on Monday to chalk out a survival strategy, which largely depends on the lenience of its creditor banks, mainly the SBI, what cannot be denied is a tacit hand of government (through its central bank) in a bailout plan. While the flamboyant liquor baron’s primary business keeps flourishing (he is in talks to acquire the marquee liquor brands in Europe), is it proper for the government to keep his sinking airline business afloat directly or indirectly?

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