More Kingfisher flights hit, government rules out bailout

New Delhi/Mumbai: Around 35 flights of Kingfisher Airlines were cancelled Monday, disrupting operations for third day in a row and the Indian government queered the runway ruling out a bailout for the cash-strapped carrier. The airline was also asked to explain the reasons behind flight cancellations.

The airline is operating only 16 of its fleet of 64 planes and has cancelled more than 100 flights since Saturday. While its Kolkata centre is virtually shut down, the airline’s international operation is in doldrums as flights to Kathmandu, Dhaka, Colombo and Bangkok had been affected.

Officials at the national capital’s Indira Gandhi International (IGI) airport and Mumbai’s Chhatrapati Shivaji International Airport said that the cancellations had created major problems for passengers who had booked on the airline months in advance.

The Director General of Civil Aviation (DGCA) has asked other airlines to accommodate the stranded passengers.

More bad news came in from Civil Aviation Minister Ajit Singh who ruled out a bailout for the airline which saw its net loss mounting to Rs. 444 crore in the third quarter of the current fiscal from Rs.254 crore suffered in the like quarter of 2010-11.

“Government is not going to give any bailout or ask the banks to bail out any private airline or any private industry for that matter,” Civil aviation minister Ajit Singh told reporters here.

The airline has been relegated to fifth place in terms of market share of 12.1 per cent.

Singh also blamed the crisis on the airline management for not paying its employees as a reason behind Saturday’s flash strike in Kolkata leading to major disruptions.

“They did not give salary to their employees for many months. People went on strike in Kolkata. Naturally, the flights got cancelled,” Singh said.

This is the second time in four months the airline has cancelled such a large number of flights without taking prior regulatory approvals. The aviation regulator has summoned the airline’s chief executive Sanjay Aggarwal Tuesday to explain the reasons behind the crisis.

“We have asked for a report from them (Kingfisher Airlines). The airlines’ CEO has been asked to appear before the Director General,” a senior official with the DGCA said.

The regulator has ordered an inquiry into the large-scale cancellations.

Meanwhile, the airline said the prime reason behind the disruption was the sudden attachment of its bank accounts by the income tax (IT) department over unpaid service taxes and that they be unfrozen.

“This has severely affected our ability to make operational payments leading to the present curtailment. We are in dialogue with the tax authorities to agree a payment plan and get the bank accounts unfrozen at the earliest,” a Kingfisher Airlines spokesperson said.

This is the second time since December that the airlines accounts were frozen by IT department.

“Employee salaries can be paid and the grounded aircraft can be recovered quicker once the bank accounts are unfrozen and the schedule restored on priority.”

The airline added that it was in touch with the DGCA and would appear before it to submit details regarding cancellations and plans for restoration of a full schedule.