Government rules out bailout to
Kingfisher, more flights hit
Monday February 20, 2012 07:43:49 PM,
IANS
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New Delhi/Mumbai: Around 35 flights of Kingfisher Airlines were cancelled Monday,
disrupting operations for third day in a row and the government
queered the runway ruling out a bailout for the cash-strapped
carrier. The airline was also asked to explain the reasons behind
flight cancellations.
The airline is operating only 16 of its fleet of 64 planes and has
cancelled more than 100 flights since Saturday. While its Kolkata
centre is virtually shut down, the airline's international
operation is in doldrums as flights to Kathmandu, Dhaka, Colombo
and Bangkok had been affected.
Officials at the national capital's Indira Gandhi International (IGI)
airport and Mumbai's Chhatrapati Shivaji International Airport
told IANS that the cancellations had created major problems for
passengers who had booked on the airline months in advance.
The Director General of Civil Aviation (DGCA) has asked other
airlines to accommodate the stranded passengers.
More bad news came in from Civil Aviation Minister Ajit Singh who
ruled out a bailout for the airline which saw its net loss
mounting to Rs.444 crore in the third quarter of the current
fiscal from Rs.254 crore suffered in the like quarter of 2010-11.
"Government is not going to give any bailout or ask the banks to
bail out any private airline or any private industry for that
matter," Civil aviation minister Ajit Singh told reporters here.
The airline has been relegated to fifth place in terms of market
share of 12.1 percent.
Singh also blamed the crisis on the airline management for not
paying its employees as a reason behind Saturday's flash strike in
Kolkata leading to major disruptions.
"They did not give salary to their employees for many months.
People went on strike in Kolkata. Naturally, the flights got
cancelled," Singh said.
This is the second time in four months the airline has cancelled
such a large number of flights without taking prior regulatory
approvals. The aviation regulator has summoned the airline's chief
executive Sanjay Aggarwal Tuesday to explain the reasons behind
the crisis.
"We have asked for a report from them (Kingfisher Airlines). The
airlines' CEO has been asked to appear before the director general
tomorrow (Tuesday)," a senior official with the DGCA told IANS.
The regulator has ordered an inquiry into the large-scale
cancellations.
Meanwhile, the airline said the prime reason behind the disruption
was the sudden attachment of its bank accounts by the income tax
(IT) department over unpaid service taxes and that they be
unfrozen.
"This has severely affected our ability to make operational
payments leading to the present curtailment. We are in dialogue
with the tax authorities to agree a payment plan and get the bank
accounts unfrozen at the earliest," a Kingfisher Airlines
spokesperson said.
This is the second time since December that the airlines accounts
were frozen by IT department.
"Employee salaries can be paid and the grounded aircraft can be
recovered quicker once the bank accounts are unfrozen and the
schedule restored on priority."
The airline added that it was in touch with the DGCA and would
appear before it to submit details regarding cancellations and
plans for restoration of a full schedule.
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