×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

DGCA to pull up Kingfisher for cancellations

DGCA to pull up Kingfisher for cancellations
Comment E-mail Print Share
First Published: Wed, Nov 09 2011. 12 31 AM IST

Photo: Bloomberg
Photo: Bloomberg
Updated: Wed, Nov 09 2011. 12 31 AM IST
New Delhi: India’s aviation regulator, the Directorate General of Civil Aviation (DGCA), plans to ask Kingfisher Airlines Ltd to explain why it cancelled scheduled flights at the peak of the travel season without permission to do so.
Kingfisher cancelled 50 flights on Tuesday, more than the 31 it had decided to ground daily for 12 days.
Photo: Bloomberg
“We will be issuing them a show-cause notice for cancelling flights and causing passenger inconvenience,” E.K. Bharat Bhushan, director general, DGCA, said. He addded that the carrier had not informed the regulator of any cancellations, thereby violating rules that govern scheduled airlines.
As a scheduled carrier, the operator has to seek the regulator’s permission before restructuring its schedule through a planned cancellation of flights. Kingfisher’s mass cancellation marks the first time an airline has scrapped a large number of flights voluntarily. Such cancellations typically happen during strikes.
The cash-strapped carrier has decided to cancel flights till 19 November, during which time it will refit the aircraft in keeping with its new business model, chief executive Sanjay Aggarwal said.
“We have started aircraft reconfiguration. We decided to close flights that were kind of slow,” Aggarwal said, referring to low-occupancy flights. It has cancelled 50 flights, he added.
Kingfisher flies to 59 cities in India and eight international destinations with 325 daily flights on a fleet of 66 aircraft; about 45-50 aircraft are now in operation.
It isn’t clear whether the 50 flights would be cancelled every day. Mint reported on Tuesday a plan by the airline to cancel 31 flights a day for 12 days. It wasn’t immediately clear whether all flights would be resumed after 19 November.
The Vijay Mallya-promoted airline has been defaulting on payments to oil companies and airports, and delayed payment of salaries to its employees in August and September. The carrier suffered a loss of Rs1,027 crore for the year ended 31 March, by when it had accumulated Rs7,057.08 crore in debt.
A Kingfisher official, who asked not to be identified, said the airline was trying to conserve cash given the tough conditions, including a shortage of spare parts. Fuel constitutes 40% of the operating cost of an airline in the country and fuel prices have risen over recent months. This person added that the airline was yet to credit salaries for October, too, by the deadline of 7 November.
State-run oil firm Hindustan Petroleum Corp. Ltd temporarily suspended supply of fuel to Kingfisher for the second time in four months on 13 October. Indian Oil Corp. Ltd and Bharat Petroleum Corp. Ltd are demanding the airline pay in cash for fuel.
Airport operators, too, are threatening to stop allowing the airline credit unless it pays them the money it owes.
GMR Infrastructure Ltd, which runs the Delhi and Hyderabad airports, has written to the airline asking it to pay Rs50 crore by 11 November, failing which it will have to pay in advance for services, a GMR official, who declined to be named, said.
Kingfisher is accommodating passengers on other airlines or refunding them, Aggarwal said.
Harsh Dhanuka, 28, who was travelling from Delhi to Hyderabad, was one of the many passengers affected on Tuesday.
“The flight was cancelled. I got an email in the morning saying so. I had a group of 10 people travelling and I was able to get tickets for all of them,” said Dhanuka, who ended up flying on Air India.
A senior executive with an online travel booking firm said his company has sought meetings with the airline’s management to figure out “what really is happening”. The executive didn’t want to be named.
The travel company provides cash advances to the airline for bookings at the start of every fortnight and plans to renegotiate the contract given the cancellations announced.
Kingfisher will also be deciding whether it wants to renew leases for about 12 aircraft, most of them Airbus A320s, over the next few months.
“The last time I have seen this (kind of behaviour) is only when NEPC and East-West Airlines started folding up,” said Mohan Ranganathan, an aviation safety expert and a former pilot. “This was in 1990s. And we had several of the aircraft lying in airfields across the country.”
tarun.s@livemint.com
• • •
Comment E-mail Print Share
First Published: Wed, Nov 09 2011. 12 31 AM IST
More Topics: DGCA | Kingfisher | Airlines | Vijay Mallya | Flights |