Tuesday, February 21, 2012

Kingfisher's CEO Sanjay Agarwal appears before DGCA

Kingfisher's CEO Sanjay Agarwal and top officials who have been summoned by the DGCA, appeared before them on Tuesday to explain the large-scale disruptions in the operations of the cash-strapped carrier.

 Agarwal said, " We are here to appear before the DGCA and answer to whatever questions it has."

DGCA had summoned KFA's CEO to explain the company's stand on large number of flight cancellations.

Sources revealed that the DGCA would review Kingfisher's revival plans and has also expressed concern over massive resignation by KFA employees.

The Civil Aviation Ministry too has held an emergency meeting over Kingfisher crisis. Talking to reporters Civil Aviation Minister Ajit Singh said," We don't know Kingfisher's plans (as of now). We are waiting for their plans."

Kingfisher Airlines Monday however virtually blamed the Income Tax authorities for the large-scale flight disruptions, saying freezing of its bank accounts by them had "severely affected" payment schedules that had led to the curtailment in its services.

"The prime reason for the current disruption in our flight schedules is the sudden attachment of our bank accounts by the I-T department. This has severely affected our ability to make operational payments leading to the present curtailment," an airline spokesperson said in a statement.

It said the employees' "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 spokesperson said the company was in talks with the I-T authorities "to agree (on) a payment plan and get the bank accounts unfrozen at the earliest. We are appealing to them to see reason that inconvenience to the travelling public is not in anybody's interests."

Over 30 flights were cancelled yesterday, including those to Bangkok, Singapore, Kathmandu and Dhaka, leaving hundreds of passengers stranded at various airports across the country.

About one-third of its flights were cancelled in six metros yesterday and similar disruption and delays were witnessed in Tier-II and III cities.

Ruling out any bailout to the airline, Civil Aviation Minister Ajit Singh said the government had recently "seized their bank accounts also. So our first concern is that flights which are ongoing, passenger safety should not be compromised and then let us sees what reply they give. DGCA is inquiring into it."

Kingfisher, which suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore, claimed only about 15 percent of its flights, operating for the past three months, have been cancelled. The airline posted a Rs 444 crore loss in third quarter this fiscal.

Monday's cancellations included 14 from Mumbai, seven from Kolkata and six from Delhi.

"We have done and are doing our best to inform guests in advance of cancellations and clubbing and to re-book them on other carriers", besides offering them full refund, the spokesperson said.

He said the airline was in touch with travel agencies "to keep them abreast of the disruptions so that they too can, in turn, ensure that guests contacting them /booking via them are kept updated of any changes."

Regarding negotiations with its prime lenders over the weekend in Mumbai, he merely said, "We have had a constructive meeting with our bank consortium last week" and, added that the airline has "not approached the government for any bailout."

The ailing carrier, which is to file a report to the DGCA on the flight cancellations since Friday night along with the reasons, said it has been in touch with the aviation regulator and has kept it informed of the disruptions.

"We will appear before the DGCA tomorrow and submit all details they want and also a plan to restore the full schedule," the spokesperson said.

He claimed there were "absolutely no safety issues with the aircraft that are operating" and the airline had "adequate numbers of flight crew and cabin crew to operate our schedule of flights."

The spokesperson of the ailing carrier said, "certain positive decisions" taken at a recent meeting of a Group of Ministers "will benefit the (airline) industry and also Kingfisher Airlines".

The GoM had a few weeks ago decided to allow direct jet fuel imports by Indian airlines and permit foreign carriers to pick up stake in them. Kingfisher promoter Vijay Mallya had been lobbying hard with the government on both these issues.

Meanwhile, a day ahead of Kingfisher top-brass meeting it, the DGCA was in the process of gathering information from all centres across the country on the cancellation and major delays of Kingfisher flights.

Based on this information as well as what the airline submits to it, the aviation regulator would decide on what action to take under the rules.

Under Rule 140(A) of the Aircraft Rules, 1937, operators require to have prior approval of DGCA to curtail their flight schedules. The violation of the rules can also amount to cancellation of the flight permit of an airline, as an extreme measure.

DGCA has also directed all other airlines to accommodate Kingfisher passengers stranded due to these cancellations without enhancing the fares.

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