Thaindian News

New Delhi, Oct 31 (IANS) Kingfisher Airlines’ debt should be seen in comparison to the company’s size, chairman Vijay Mallya said Monday, adding that the carrier has nine years to repay its dues.

“You should see the debt in comparison to our size. We have nine years to repay it,” Mallya told reporters on the sidelines of an industry event here.

According to Mallya, while the company’s debt was manageable, the rising interest cost was a cause of concern.

“The rising interest rate is a cause of concern.”

The airline, which has a Rs.6,000 crore debt, took various steps like hiving off low-cost operations and restructuring a part of its debt.

The airline also has plans to raise $250 million through a Global Depository Receipt (GDR) issue.

The airline’s fuel supply was recently halted by Hindustan Petroleum for a few hours after its dues touched Rs.650 crore.

On the issue of allowing Foreign Direct Investment (FDI) in domestic airlines, Mallya said: “We need to have FDI in the domestic airlines.”

The Department of Industrial Policy and Promotion (DIPP) under the commerce ministry has floated a draft cabinet note on allowing FDI up to 26 percent stake in domestic airlines.

Meanwhile, Civil Aviation Secretary Nasim Zaidi said that the government was in the process of reviewing the FDI policy for domestic airlines.

“The government is in the process of reviewing the existing FDI policy framework,” Zaidi said at the CII event.

Zaidi further said that the government is aware of the concerns raised by the sector, in the backdrop of domestic airlines’ expected losses of Rs.3,500 crore in the first six months of this fiscal.

“The government is aware of the concerns and is looking into all aspects that have the potential of ensuring rapid, inclusive and sustainable growth of the industry,” he added.