In an unexpected boost for Kingfisher Airlines, Prime Minister Manmohan Singh said on Saturday that his government would explore "ways and means" to help the private carrier.
A sign at the closed Kingfisher Airlines booking counter at the city airport in Mumbai.
"I have not applied my mind yet to Kingfisher's problems. When I get back, I will talk to (civil aviation minister) Vayalar Ravi …," he told journalists on board his special flight while returning from the Saarc summit in the Maldives.
He said private sector airlines should be managed efficiently, "but if they do get into difficulties, we have to find ways and means to help them."
Singh's remarks came on a day when Kingfisher promoter Vijay Mallya questioned whether it was his airline's duty to operate on loss-making routes.
Kingfisher hasn't made any profit since its inception in 2005 and has lately been delaying payment of salaries.
"Every government has gone out of the way to support airlines and connectivity. In India, airlines are over-taxed and over-charged. Wonder why?" tweeted Mallya, who owns a cricket team and an F1 team.
"Is it Kingfisher's duty to fly on loss-making routes when state governments tax heavily? Or should we be financially prudent and fly profitably?" he said in another tweet.
The government, meanwhile, clarified that no bailout package had been proposed for Kingfisher.
"This is to clarify that no bailout package is pending before the government nor has been proposed by ministry of civil aviation for Kingfisher Airlines," Ravi said.
Kingfisher's operations continued to be hit badly as dozens of flights were cancelled on Saturday taking the total number of flights cancelled to over 200 in the one week.
The directorate general of civil aviation (DGCA) is closely watching over the fare structure, too.
"Though the fares have risen on sectors where tickets are going for over Rs. 10,000, they are still within the fare bracket," a DGCA official said.
The DGCA has asked the airline to give more details of its plans to reconfigure its fleet.