scorecardresearch

DGCA summons Kingfisher Airlines CEO, govt says no bailout

The Directorate General of Civil Aviation has sought explanation from the airline's officials for the large-scale disruption in its operations over the past three days - about 80 flights were cancelled on Sunday and another 20 on Monday.

Kingfisher Airlines operations continued to be disrupted for the third consecutive day with about 20 flights cancelled on Monday. Fresh trouble brewed for the Vijay Mallya-owned airline as the Directorate General of Civil Aviation (DGCA) summoned CEO Sanjay Aggarwal and other officials to explain the large-scale disruption in operations over the past three days.

Kingfisher Airlines officials, however, refused to comment on the potential action by the DGCA.  The government, on the side, ruled out any bailout for the Vijay Mallya-owned carrier.

DGCA has asked senior officials of the airlines to appear before it on Tuesday to explain the cancellations.

About 80 flights of the carrier from six metro cities did not operate on Sunday leaving hundreds of passengers stranded. The ailing carrier had till late last evening failed to file a report on the number of flights it had cancelled since Friday night to the DGCA.

Meanwhile, Civil Aviation Minister Ajit Singh made it clear that government will not bailout the airline.

PERSPECTIVE: Can leasing out aircraft help Kingfisher?

"No, government is not going to have any bailout," the minister told reporters, adding, "government is not going to ask banks or private industry for that matter".

"Recently government had seized their bank accounts also. So our first concern is that flights which are ongoing, passenger safety should not be compromised and then let us see what reply they give. DGCA is inquiring into it," Singh said.

The cancellations of flights have affected incoming or outbound flights in Mumbai, New Delhi, Chennai and Bangalore.

The abrupt flight cancellations had created major problems for passengers waiting to travel after having booked their tickets months in advance, an official at the Chhatrapati Shivaji International Airport said.

However, on Sunday, the beleaguered carrier reeling under financial losses had claimed that despite flight disruptions since the past couple of days, it has not shut down any stations from its schedules.

The developments have also worried passengers intending to travel on Kingfisher flights in the coming weeks.

"Last minute cancellations jeopardise our travel and onward plans, while other carriers charge heavily for the same sector if we try to cancel and make alternate bookings," said A.A. Kinariwalla, a manager with a multinational in Mumbai, who is a frequent flier on domestic and international sectors.

A Kingfisher spokesperson blamed the flight disruptions on certain unexpected incidents like 'bird hits' which rendered its aircraft out of service.

FULL COVERAGE: What ails Kingfisher Airlines

The flight disruptions are expected to continue for another three to four days with only 208 flights in operations, but the carrier has not shut down nor does it plan to close down any stations, the official said.

"The speculation that we are reducing our operating schedule from 240 flights a day are ill-founded, as we will operate the full schedule on our booking system within the next four days," the spokesperson added.

While admitting that its bank accounts have been attached by the Income Tax Department, Kingfisher said in the past also similar issues have happened and they have been resolved.

"We have had a good meeting with our consortium of Banks who have accepted, in principle, the viability study prepared by SBI Capital markets and independent consultants. Our request for additional working capital has been acknowledged by the consortium and is subject to individual bank approvals," the spokesperson said.

The developments come after high fuel costs and falling revenue resulted in Kingfisher's losses in the third quarter of the current fiscal mounting to Rs 444 crore from a net loss of Rs 254 crore suffered in the like quarter of 2010-11.

With inputs from agencies