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28 March 2024

India's Kingfisher may lose flying licence: minister

Published
By AFP

India may cancel the flying licence of debt-laden Kingfisher Airlines if it fails to meet safety standards and pay its bills, the aviation minister warned on Tuesday.

Kingfisher chief Vijay Mallya has been summoned to meet the Director General of Civil Aviation (DGCA) Bharat Bhushan Tuesday or Wednesday in New Delhi to explain the airline's current situation and discuss a revival strategy.

"We will convey our points to the DGCA," Mallya, who also runs a global liquor empire, told reporters in New Delhi, without elaborating.

Separately, the civil aviation regulator told Indian television news channel NDTV that Kingfisher had said it was unable to live up to its earlier flight scheduling commitments.

"It's a completely difficult situation which cannot go on like this. I would not like to speculate more," Bhushan said.

Kingfisher shares plunged 12 percent on investor worries the airline would shut before recovering marginally to trade over seven percent lower at 18.65 rupees. Shares hit an all-time low of 17.55 rupees in November.

"We have to look at how they are meeting safety norms. The regulator continues to examine each Kingfisher flight for safety," Aviation Minister Ajit Singh told reporters.

"If required, the licence can be cancelled as passenger safety is a top priority," Singh said, adding Kingfisher's financial arrears could also force the carrier's grounding.

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. The pilots are on strike over unpaid wages.

Kingfisher now operates 18 planes, Singh said, down from 28 last month. Before its cash squeeze, Kingfisher operated 64 aircraft monthly.

Kingfisher announced earlier in the month it was stopping most international flights to reduce costs.

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.

The carrier has never turned a profit since its launch in 2005 and owes millions of dollars to suppliers, lenders and staff.

Mallya has promised a full recovery plan for the carrier shortly.

In a separate development, Anil Kumar Ganguly, an independent director, quit the Kingfisher board on health grounds -- the second director to exit within a week.

Ganguly's exit means all Kingfisher's independent directors have now quit.

Experts have blamed Kingfisher's woes on a string of factors including too rapid expansion, high fuel costs and price wars among carriers.