November 11th, 2011
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The sun is setting on Kingfisher

kingfisherNew Delhi: Kingfisher has been operating only 269 flights of its allocated winter schedule of 418 daily flights on Thursday. A shocking 149 flights – 36% of its daily allocated schedule – were not operated. Kingfisher has said that it has cancelled flights to reconfigure its Airbus A-320 aircraft. However, it is learnt that around 130 pilots have quit the cash-strapped carrier in the past few weeks.

More than 30 Kingfisher Airlines flights were cancelled or clubbed on Thursday, the fourth consecutive day, when the airline’s services remained disrupted. Also, 30-odd pilots and cabin crew failed to report for duty, preferring to remain on sick leave, thereby worsening the problem.

Sources said a “fair number” of pilots have left the airline to join other low-cost airlines in the last few months because of Kingfisher’s plans to exit to the low-cost segment. Also, salaries haven’t been paid to some pilots for as long as three months.

Apart from non-payment of salaries, unwarranted income tax notices to pilots have made matters worse. “The airline has not deposited tax due from pilots in the government’s coffers for three years, and this is now hurting pilots as they have started getting I-T notices,” sources said.

Airport operators, oil companies and vendors of all imaginable items have massive dues running with Kingfisher and are demanding that owner Vijay Mallya pay up. Given the shortage of crew and funds, the airline has truncated its schedule, perhaps opting to “fly less and spend less”.

Kingfisher is struggling with truant crew, unavailability of aircraft and unpaid dues (to oil companies and airports). The airline’s flight schedule has been severely hit after oil companies stopped supplying it with fuel on credit and began insisting on cash payments.

Three oil companies – HPCL, IOC and BPCL, have stopped granting credit to Kingfisher for lifting jet fuel and put it on a cash-and-carry payment mode even as Kingfisher CEO Sanjay Agarwal said that the situation was much better now.

The oil companies allege that Kingfisher owes them almost Rs 200 crore in dues. Kingfisher has suffered a loss of Rs 1027 crore in 2010-11 and has a debt of over Rs 7057 crore.

Stepping in to resolve the mess, aviation regulator DGCA had sought an explanation from the airline about changes in schedule and reasons for not being informed in advance. Kingfisher could even face cancellation of its operating permit if it can’t explain the current schedule disruption. It is yet to reply to the show cause notice.

Passengers booked on Kingfisher flights at major airports on Thursday complained of harassment and inconvenience, saying they had to rebook themselves on other airlines paying a premium of 20-40% at the last minute.

“In its current health, Kingfisher has two options – shut down or downsize significantly to survive for some time till either the environment improves or a suitor is ready to buy the airline,” a highly placed industry source said. Cash strapped Kingfisher Airlines is in trouble. The airline may have to shut down if they don’t secure working capital loans soon.



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