No plans to cancel Kingfisher Airlines licence: DGCA
The civil aviation regulator said today authorities had no plans to cancel the flying licence of Kingfisher Airlines and that the carrier had a revival strategy. The comments came after the aviation minister had said "if required, the licence can be cancelled as passenger safety is a top priority." 'KFA to suspend all international flights'india Updated: Mar 21, 2012 00:33 IST
The civil aviation regulator said on Tuesday that the authorities had no plans to cancel the flying licence of debt-laden Kingfisher Airlines and that the carrier had a revival strategy.
The comments came after aviation minister Ajit Singh had told reporters that "if required, the licence can be cancelled as passenger safety is a top priority."
The airline, which has never turned a profit since its launch in 2005 and owes millions of dollars to suppliers, lenders and staff, has cancelled scores of flights recently due to a cash crunch.
"As of date, there are no plans to cancel the (Kingfisher) licence," Director General of Civil Aviation (DGCA) Bharat Bhushan said in New Delhi after meeting Kingfisher chief Vijay Mallya, who also runs a global liquor empire.
"There is no cause for panic and no deadline has been imposed on them. Our field officers will monitor the situation as it evolves," Bhushan said.
Mallya had been summoned to meet Bhushan in the Indian capital to explain the Bangalore-based airline's situation and discuss a recovery plan.
"Kingfisher is severely hamstrung... things are difficult but he (Mallya) has a plan in place which he has discussed with me. I cannot disclose more about this due to confidentiality issues," Bhushan said.
Bhushan, however, added that he was unsure if Kingfisher would ever be able to repay its liabilities.
"I have to be frank -- I don't get their assurance even now."
Kingfisher shares plunged 12 percent Tuesday on investor worries the airline would shut before retracing some of their losses to close down 5.22% at 19.05 rupees. The shares hit a record low of 17.55 rupees in November.
The carrier has cancelled nearly half of its flights due to a strike by pilots and its financial difficulties, running around 100 flights a day instead of its scheduled 175. Some of its pilots are on strike over unpaid wages.
Kingfisher now operates 18 planes, Aviation Minister Singh told reporters. Before its cash squeeze, Kingfisher operated 64 aircraft.
Just after the meeting with Bhushan, Kingfisher said it was grounding all its international flights to reduce costs after earlier this month announcing a partial shutdown of overseas routes, the Press Trust of India reported.
The airline's bank accounts have been frozen by Indian authorities due to a failure to pay taxes which it collected from passengers. It also has been dropped by a crucial global payments and booking system run by the International Air Transport Association.
Experts have blamed Kingfisher's woes on a string of factors including too rapid expansion, high fuel costs and price wars among carriers.