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IATA
suspends Kingfisher from inter-airline transaction system
Wednesday March 07, 2012 09:35:34 PM,
IANS
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New Delhi/Mumbai: In
yet another big blow to Kingfisher Airlines, a leading
international association Wednesday suspended the carrier from its
inter-airline transaction body for failure in settling dues since
February.
The move -- which is akin to the Reserve Bank of India (RBI)
removing a commercial bank from its currency clearing system --
came barely hours after the Income Tax Department froze more bank
accounts of the Vijay Mallya-led carrier for non-payment of dues.
According to industry experts, the move to suspend Kingfisher from
the clearance system on account of non-payment of dues to the
International Air Transport Association (IATA) is expected to
affect nearly 30-35 percent of its business.
This puts a question mark over whether tickets for the carrier can
now be booked using globally interconnected systems like Galileo,
Sabre and Amadeus.
The airline in response said it was unable to pay its dues because
its bank accounts were seized by the Income Tax Department with
whom the passenger carrier is negotiating.
"Due to the accounts getting attached by the tax authorities, we
were not able to make a payment to (IATA) which resulted in a
temporary suspension," an airline official said.
"We are working with the tax authorities and expect the accounts
to be un-attached shortly. As soon as this is done, we will pay
our dues to IATA and get reinstated."
The airline has also reassured its passengers that suspension will
not impact them and that they can book their tickets directly with
the carrier.
The IATA had previously barred Kingfisher from its international
ticket clearing house (ICH) system on Feb 2, but reinstated it
eight days later after some payments were made.
"IATA has suspended Kingfisher Airlines' participation in the ICH.
This is because the airline did not settle their ICH account
within the stipulated deadline," a statement issued by IATA from
Geneva said.
"Kingfisher's participation in the ICH will be reinstated after
the airline fulfils the ICH requirements," said the association
that has all passenger and cargo carriers as its primary members.
IATA further said that the passenger carrier will not be able to
settle its transactions from other ICH member airlines.
"Suspension from the ICH means that airline will not be able to
settle their transactions with other ICH members via the clearing
house."
However, despite the suspension, airlines can continue to function
by settling bilaterally with other airlines.
Kingfisher's woes were exacerbated Feb 18 when its employees in
Kolkata went on a flash strike as they had not received their
salaries for several months.
The airline, which later on curtailed its flight plans, blamed the
seizure of its bank accounts in February by the Income Tax
Department as the main hurdles in clearing of dues.
Kingfisher has a debt of Rs.7,057.08 crore. Its net loss widened
to Rs.444.27 crore for the quarter ended Dec 31, 2011, from
Rs.253.69 crore in the October-December quarter in the last
fiscal.
The airline's share, which was ruling at Rs.49.25 about a year
ago, closed Wednesday at Rs.21, with a loss of 6.25 percent over
the previous close.
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