Indian government rules out Kingfisher bailout

Fair enough. As India do not have a equivalent of Chaptger 11 in US, Government of India has every right to let IT fail. For IT's failure, IT is largely to be blamed. It will be a difficult task to convince bank to still lend to IT. With incresing number of cancellations, the number of immediate future bookigs will go down. IT has to slash fare to offset this and could well go into a spiral until it crash lands.
At the moment, i dont see a future for IT. Even if banks are willing to lend, it woulf come at a much higher cost.

The criticism of the government is unwarranted. Kingfisher went through the equivalent of a pre-packaged Chapter XI where the Debt Recast Package saw banks swap debt positions for equity in accordance with Reserve Bank of India guidelines. One cannot sell below cost forever and hope to make it up in volume. For an alleged Low Cost Carrier, IT-Kingfisher has astonishingly high wages for India and its aircraft leases reflect top of market costs. But when one runs out of parts to cannibalize from previously parked airplanes, key things like engines, it all comes to a screeching grinding halt. It was once easy to fix, but now it may be too late. It is certainly not "too big to fail."