“You can't close down a company because they are making losses or banks are not giving them money. As long as passenger safety is not jeopardised, as long as they keep their schedule, why should we close down any industry?” civil aviation minister Ajit Singh told reporters

New Delhi: Beleaguered Kingfisher Airlines cannot be closed down just because it is making losses and banks are not helping it out with funds, reports PTI quoting civil aviation minister Ajit Singh.

“You can't close down a company because they are making losses or banks are not giving them money. As long as passenger safety is not jeopardised, as long as they keep their schedule, why should we close down any industry,” civil aviation minister Ajit Singh told reporters here.

He was responding to a question from reporters whether the government would take stringent action against the airline if it flouts rules.

His comments came even as the Vijay Mallya-owned carrier was asked by its bankers to infuse fresh equity on its own before they lent it additional funds.

Bank chiefs have been quoted as saying that Kingfisher would need to arrange fresh equity of Rs1,000-Rs2,000 crore before seeking additional funds from the consortium of banks, led by State Bank of India (SBI).

To another question, the minister said closing down of any airline would impact passengers.

He said Kingfisher has submitted a new schedule of its flights to the Directorate General of Civil Aviation (DGCA) which would closely monitor it.

A consortium of 18 banks, comprising 14 state-owned and four private banks, have provided huge sums to the cash-strapped airline, which has a total debt of about Rs7,057 crore and accumulated losses of about Rs6,000 crore.

The banks are expected to hold meetings with the Reserve Bank of India (RBI) on the financial mess facing the airline as its loans are reportedly turning to non-performing assets (NPAs) in the past weeks. They are expected to take a call on whether or not to extend fresh credit line to the ailing carrier.

Kingfisher’s net loss shot up to Rs444.26 crore for the quarter ending 31 December 2011 from Rs253.69 crore in the October-December quarter of the previous fiscal. It had suffered a loss of Rs1,027 crore in 2010-11.

The ailing carrier has been put on cash-and-carry mode by the Airports Authority of India (AAI) as well as the oil companies for airport charges and jet fuel supplies.

Compounding its troubles, the excise authorities have frozen the bank accounts of the carrier for its failure to pay service tax dues of about Rs35 crore. The Income Tax authorities had earlier frozen Kingfisher’s accounts.

As per its new schedule, Kingfisher is now operating about 170 daily flights against over 400 it sought permission for in November. It would not be operating direct flights to some major cities and several Tier-II cities now on, as per the truncated schedule it has submitted to the DGCA.

The airline has also informed DGCA that it would strive to bring in to service in the next week or 10 days 16 more planes in addition to the 28 it has promised to the regulator that it would operate. Of the 64 aircraft fleet, 28 are now operational.

Due to its truncated flight schedule, the airline is likely to lose several prime flying slots, which are a period of time within which a plane has to take-off.