Kingfisher Airlines, which is struggling to stay afloat, today suffered yet another blow with global airlines body IATA suspending it for not clearing its dues.
The ailing carrier said payments would be made as soon as tax authorities de-froze its bank accounts.
This was the second time in just over a month that the airline was suspended on the same count from the IATA Clearing House (ICH) through which airlines and related firms settle accounts for services provided by them to other such companies.
A large number of bank accounts of the beleaguered airline have been frozen by the income tax, service tax and excise and customs departments for its failure to clear dues.
"IATA has suspended Kingfisher Airlines' participation in the IATA Clearing House (ICH). This is because the airline did not settle their ICH account within the stipulated deadline," IATA's Assistant Director (Corporate Communications) Albert Tjoeng said in a statement from Singapore.
He said, "Kingfisher's participation in the ICH will be reinstated after the airline fulfills the ICH requirements."
The airline was earlier suspended from ICH on February two but its status was restored ten days later. It has now been suspended once again, IATA sources said.
Reacting to the development, an airline spokesperson said "due to the accounts getting attached by the tax authorities, we were not able to make a payment to ICH which resulted in a temporary suspension.
"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." Both IATA sources and the Kingfisher spokesperson said the suspension from ICH would not affect its ticket bookings.
"Our guests can continue to book with confidence either directly with Kingfisher Airlines or through their travel agents," the airlines spokesperson said, adding that the carrier was operating 200 flights to 46 domestic and international destinations.
He said the suspension from ICH would also not impact Kingfisher flight schedules or the passengers travelling on any of its flights.
IATA sources said the suspension means that the airline will not be able to settle their transactions with other ICH members via the IATA Clearing House. It would have to settle its bills with their partners directly on a bilateral basis.
With oil companies blocking fuel supplies and disrupting its flight schedules in the past few weeks, troubles have mounted for Kingfisher as its lenders have insisted they would not pump in money unless the promoters infused fresh equity.
The airline has been told by the bankers that it should get at least 25 % of the Rs 3,000 crore loan it is looking for in the form of fresh equity. The Airports Authority of India and other airport vendors have also put Kingfisher on a 'cash-and-carry' mode for providing aeronautical services.
Kingfisher had last month also delayed joining the global airlines' grouping 'oneworld' due to its precarious financial position. It was slated to formally join the airline alliance on February 10.
The airline, which never made a profit since inception in May 2005, reported a net loss of Rs 444.26 crore in the December quarter. It suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore apart from over Rs 4,000 crore of accumulated losses and a restructured long-term loan of around Rs 7,000 crore.