Kingfisher Teeters as DGCA Loses Faith

Airline to halt foreign flights; aviation minister talks tough

Troubled Kingfisher Airlines teetered on the edge on Tuesday, fast losing support of both the government and the regulator and unable to come up with a credible plan to revive its flailing fortunes. 

Vijay Mallya, chairman and promoter of the airline, emerged from a two-hour meeting with the Director General of Civil Aviation (DGCA) sounding confident and promising a revival, but the government remained far from impressed, questioning Mallya's optimism and highlighting various financial and legal issues. For the first time since it was launched with great fanfare in 2005 — with Mallya promising a completely different flying experience — the airline stands on the brink of closure. The government has so far shied away from commenting publicly on the airline's fate. But on Tuesday, a chorus of voices led by Civil Aviation Minister Ajit Singh seemed to indicate a substantial and complete rethink on the government's part. 
On Tuesday evening, Singh tossed the ball firmly in Mallya's court, saying the onus of revival is firmly on the liquor baron. More importantly, he held out the prospect of legal action by saying dues and taxes have to be paid. "Kingfisher Airlines is liable for prosecution over unpaid taxes," Reuters quoted Singh as saying. Civil Aviation Min Sounds Caution 
Schedules can't be jeopardised in this business. But the bigger thing is non-payment of airport, fuel and salary dues. Today he should be able to convince the DGCA that he can clear those dues," Singh added. Singh said if the DGCA report is of the opinion that safety cannot be assured in Kingfisher operations, then the government could suspend the airline's licence. "We are not giving last or first chance to Mallya. He has to decide whether to run the airline or how to run the airline. To continue to have the licence, they have to have five aircraft but at present the financial situation is bad," the minister admitted. 
The DGCA, Bharat Bhushan, also doubted the revival plan submitted by Mallya, his fourth schedule in as many months and this time with just 16 aircraft. 
"The airline is severely hamstrung for want of funds and there is no assurance on whether he (Mallya) will be able to defray his liabilities," Bhushan said, adding he may submit a report on the airline to the government "as early as tomorrow (Wednesday)". Kingfisher has debt of . 7,057 crore and accumulated losses of about . 6,000 crore. The airline has cut domestic operations and is set to suspend all international flights. Banks have refused to give more money till the promoter brings in new equity and fuel companies have put the airline on cash and carry. The International Air Transport Association has suspended KFA from its inter-airline transaction body IATA Clearing House (ICH) and Billing & Settlement Plan (BSP) accounts on March 9 for non-payment of dues. 
Its five-star rating service has also been suspended by SkyTrax Research after cuts in its international network. State-run AAI has decided to allow Kingfisher to operate only those flights for which the airline has paid from Monday midnight to Tuesday midnight.