In a major setback to the Kingfisher Airlines, the Directorate General of Civil Aviation (DGCA) has summoned its CEO Sanjay Aggarwal, as the airline continues to cancel flights for the third consecutive day.
Clearing the air of speculation of a bailout package for the beleaguered airline, Civil Aviation Minister Ajit Singh said “It is upto the banks to decide on providing loans to Kingfisher.” He asserted that it is not the government’s job to bail Kingfisher out of the trouble zone.
He said the government is not going to provide any revival package to the private airlines at the moment.
However, he said that a panel led by the Civil Aviation Ministry is looking into the matter whether any assistance should be provided to the private airlines or not in the long term.
He said “We are looking into things with a long term prospect.”
The panel will submit its report to the Finance Ministry, which will take the final course of action with regard to revival package for Kingfisher and other airlines as well.
The domestic aviation sector which currently is battling against high ATF prices is in doldrums as the margins continue to slide.
Today, KFA cancelled 27 flights across the country, leaving the passengers in lurch.
It has cancelled 12 outgoing flights from Mumbai and four from Delhi early this morning.
The fresh cancellations come a day after almost half of its flights from major metros were cancelled or delayed on Saturday.
Yesterday, Kingfisher, had suspended its operations in Kolkata and also cancelled 16 flights from Mumbai.
However, a statement issued by the airline on Saturday said there have been flight disruptions since Friday which will continue for four days due to unexpected events including bird strikes.
All these cancellations come amidst reports that the airline is going through financial trouble and one of its bank accounts has been seized by the income tax authorities. The Kingfisher management said that this is a planned move and they don’t intend to shut down any of its existing operations.
“We confirm that our Bank accounts were attached by the tax authorities. However, this has happened in the past not just to us but also to Air India. We have resolved issues before and will do so again,” the Kingfisher spokesman said.
Meanwhile, alarmed over reports of large-scale flight disruptions, Directorate General of Civil Aviation (DGCA) on Saturday started gathering information on the cancellations and delays and would decide whether to initiate any action on the airline on that basis.
“We have received reports about large-scale cancellations. They are bound to inform us when they cut their schedule. But they have not done so,” DGCA chief E K Bharat Bhushan told media.
He said if the reports were true, such large of flight disruption would constitute violation of rules.
“We are gathering information from all the centres. Once we get this, we will decide what to do,” he said.
Under Rule 140(A) of the Aircraft Rules, 1937, operators require to have prior approval of DGCA to curtail their flight schedules.
Bhushan also said that messages have been sent by the DGCA to all other airlines to accommodate all passengers stranded due to these cancellations by Kingfisher on Saturday.
“They have to do this without enhancing the fares,” he said when asked about the severe hardships being faced by the passengers of cancelled Kingfisher flights.
The airline was operating only about 160-180 flights out of its already curtailed winter schedule of 240.
The sources said operations from Tier-II and Tier-III cities are likely to be affected until March-end.
The airline began cancelling its flights as it held talks with bankers to finalise a deal for funds. Kingfisher posted a Rs 444 crore loss for the third quarter.
The airline has suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore, latest figures show.
With Agency Inputs