Kingfisher flying permit expires, shares down over 2%
The number of domestic scheduled carriers would be down to six on Tuesday. KFA failed to convince the aviation regulator on how it planned to fund operations under a proposal to get it flying again, HT reports.india Updated: Dec 31, 2012 23:18 IST
The number of domestic scheduled carriers would be down to six on Tuesday.
Debt-laden Kingfisher Airlines’ (KFA) scheduled operator permit or flying licence expired on Monday after it failed to convince the aviation regulator on how it planned to fund operations under a proposal to get it flying again.
Shares of Kingfisher Airlines fell by over 2% following the announcement. Shares of the company finally ended at Rs. 14.9, down 2.4% from its previous close on the BSE. At NSE, the scrip settled 2.62% lower at Rs. 14.9.
KFA’s flying licence was due to expire on December 31. The airline had applied to the Directorate General of Civil Aviation (DGCA) for the licence renewal and had also submitted a revival plan. Sources said the revival plan had failed to inspire confidence in the regulator.
KFA, however, has two years from now to get its licence renewed.
“There is no cause for concern as the regulations permit license renewal within two years of expiry,” a KFA spokesperson said. Kingfisher restart and rehabilitation plan to the DGCA, he said, clearly states that the funding required would be provided by the UB Group. “The DGCA has asked for certain no objection letters that are in the process of being procured. Further, a few additional questions will be answered to the regulators satisfaction.”
The onus, experts say, is now on the government to ensure that KFA, once it flies again, does not falter again.
“As per civil aviation rules for scheduled carriers, an airline cannot be given a permit if it is not financially viable to fly,” said Captain Mohan Ranganthan, a member of government-appointed Civil Aviation Safety Advisory Council.
The airline, promoted by billionaire Vijay Mallya, will have to convince banks, airports, tax authorities and its staff about its viability. Kingfisher, which has not operated a single flight since October 1, owes money to all of them and hasn’t paid employees for last seven months. It has been trying unsuccessfully to raise fresh funds for more than a year, and is hoping to tap Abu-Dhabi’s Etihad Airways as an investor.