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No government bailout for Kingfisher, DGCA seeks explanation over flight cancellations

New Delhi , Tue, 21 Feb 2012 ANI

New Delhi/Mumbai, Feb.21 (ANI): The Directorate General of Civil Aviation (DGCA) on Tuesday sought an explanation from private carrier Kingfisher Airlines over its mass cancellation of flights, which have caused inconvenience to passengers.


Civil Aviation Minister Ajit Singh said the top executives of the embattled airline would need to do some serious explaining as it had skirted the rules by not informing the DGCA about the proposed flight cancellations.


"The DGCA has asked explanation because the passengers (of Kingfisher Airlines) were not informed, the DGCA was not informed and that is against the rules. That, as you say, causes inconvenience to passengers. So, we have to hear Kingfisher," said Singh.


Kingfisher, controlled by liquor baron Vijay Mallya, has cancelled 32 out of the 240 flights that it operates each day.


The carrier, whose executives met DGCA chief Bharat Bhushan on Tuesday, have said that the airline as forced to cancel flights because tax authorities had frozen its bank accounts, hurting its ability to make operational payments.


Banks own about a quarter of cash-strapped Kingfisher, which has so far been unable to attract fresh equity amid growing worries about its future.


Kingfisher, named after the country's most famous beer, lost 4.4 billion rupees in the fiscal third quarter that ended in December.


Singh ruled out a bail out package for the debt-ridden private carrier.


"In any industry one big company goes down, it does affect people but you are certainly not going to advocate that banks should bail out all the failing companies," Singh said.


Kingfisher shares plunged as much as nearly 20 percent on Tuesday ahead of a meeting between the airline's top executives and the country's aviation regulator.


However, local media reports said Kingfisher Airlines Ltd, which has seen an exodus of pilots from its ranks, plans to return some aircraft voluntarily to lessors after defaulting on payments.


These include returning two more Airbus A320s this month to their lessors, as their leases have been terminated because of payment defaults, the Mint newspaper reported on Tuesday, citing a government official who declined to be named.


Of the 64 planes in its fleet, Kingfisher is using just over a dozen to operate flights currently, the newspaper said.


The cancellations have brought the passengers to stagger at the Mumbai airport.


An irate passenger, Ankita Sharma bemoaned that she would never travel with the Kingfisher in future.


"Same problem, we have to go and the flight is not on time. So, it is like same problem we are facing. We cannot trust on Kingfisher now. Next time, we will prefer any other flights," said Sharma.


Indian airline companies, on course to lose $3 billion for the year ending in March, have struggled with low fares, high jet fuel prices and fierce competition. Five out of six major carriers in India are losing money.


Kingfisher shares plunged as much as nearly 20 per cent ahead of Tuesday's meeting with the DGCA. (ANI)


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