Troubles continue for Kingfisher Airlines, may lose prime flying slots (ET - Flight School)

The uncertainty over a quick bank bailout grew with a Federal Bank official saying the 18-bank consortium lenders are looking at the viability of the proposal floated by SBI Caps and that "anything can happen only over the next two to three weeks."
The Vijay Mallya-promoted airline meanwhile began operating a truncated flight schedule today even as DGCA considering punitive action against it for allegedly flouting regulations. The airline cancelled 48 flights today,

The Government on its part adopted a wait-and-watch approach.
"If the banks find it good business, they will loan their money (to Kingfisher). .... At the same time, the government is not going to ask banks to loan money to any private industry. It's for the banks to decide ... on the basis of whether they will get it back or not," Civil Aviation Minister Ajit Singh told reporters here.
Several banks told PTI on condition of anonymity that it makes no sense for a banker to get fingers burnt again by lending to a borrower that is losing huge sums of money every month.
"Why should a bank lend more to a company that has burnt over Rs 1,000 crore this fiscal?", a senior official of the Delhi-based public sector lender Punjab National Bank (PNB) said. 
The official said this while referring to the about Rs 900-crore loss that Kingfisher suffered during the last two consecutive quarters ending December 2011.
Discussions were also on between the Income Tax Department and Kingfisher on lifting the freeze on the carrier's bank accounts, an I-T official said in Bangalore.
The Directorate General of Civil Aviation (DGCA) was examining the airline's operational details to consider punitive action since carriers need its prior approval to curtail their flight schedules.