Kingfisher Airline chief Vijay Mallya has to act fast and take measures as the airline is facing a danger of a licence cancellation with its fleet fast depleting. Even the banks are likely to tighten the grip as the Kingfisher brand is losing its glow.
The Reserve Bank Of India has reminded the lenders that it can’t be used as collateral for the huge loan exposure they have to the airline. According to media reports licence cancellation is hanging on the airline as the fleet of Kingfisher has come down to just seven.
If the number falls before five then the Directorate of Civil Aviation will have no choice but to cancel the flying license. The situation is delicate considering the fact that Mallya has not said anything about the United Spirits Stake sale to Diago.
Mallya on September 25, 2012 said, “There is no certainty that a transaction will be done”. Reports have said that Mallya may not favour losing control of his liquor business which the UK distiller is keen on gaining. But whatever Mallya’s options are, the airline chief has to take a decision in war footing. Even the bankers have said that they will not lend further to the airline which is already debt ridden.