Vijay Mallya: All is well, meeting with IATA today

Driven to the wall, Kingfisher promoter Vijay Mallya Thursday said he had asked tax authorities to de-freeze bank accounts and promised to come up with a roadmap in the next few days to bring the ailing carrier back on track.

With Kingfisher being forced to curtail its flights, Mallya met pilots protesting delay in salary payments, claiming that their issues had been addressed.

"I have made a representation to the tax authorities (to get Kingfisher's accounts de-freezed). It is under active consideration," Mallya told reporters.

"In few days time, we will have crystal clear roadmap how Kingfisher will move ahead. Also, I have a meeting scheduled for tomorrow with IATA Secretary General... I hope issues will be resolved and we will come up with a firm schedule," Mallya said.

The cash-strapped carrier has been suspended for non-payment of dues by IATA from three of its crucial platforms which enable carriers to transact their businesses.

In Hyderabad, the International Air Transport Association (IATA) said it was in talks with Kingfisher on the terms to revoke its suspension.

Terming his meeting with the pilots as "good and interactive", Mallya said, "their issues were addressed". The pilots insisted that their dues should be paid expeditiously, a representative of the agitators said.

Irked over not getting their salaries for past five months, pilots and some other employees have boycotted work over the past few weeks, resulting in cancellation of over 40 daily flights.

When asked about investments by foreign airlines, Mallya said "we are working relentlessly with potential investors, they can invest only when the Government has a policy in place."

Pressed further as to who the potential investors were, he said, "we have one foreign airlines and also some non-airline investors", but did not divulge any details.

Kingfisher has a debt of Rs 7,057.08 crore and the financial crunch has hit its operations with dozens of flights being cancelled regularly. Tax authorities have also freezed its bank accounts for non-payment of dues.

To add to its woes, IATA earlier this month had to suspend Kingfisher after it failed to provide with a cash deposit, required to continue its participation in the Billing and Settlement Plans (BSP) and the Cargo Accounts Settlement System (CASS).

In Hyderabad, IATA Director General Tony Tyler said "the difficulties of Kingfisher are well known...We had to suspend Kingfisher from the travel agency clearing house.

"It is necessary to protect the whole system. It is the system we operate on behalf of hundreds of airlines. We are now discussing with Kingfisher the terms on which we can reinstate them."

Tyler said the suspension of Kingfisher from the clearing house was not unprecedented as the airline failed to meet the obligations in terms of paying up on time.

"The suspension is automatic and happens regularly with different airlines. Kingfisher is a member of IATA. We want to help them as much as we can. I hope they will overcome," Tyler added.

IATA: Turbulent times ahead for Indian aviation sector

The Indian aviation industry may not do well this year in the absence of any major structural changes, pex body for the global airline industry IATA's Director General Tony Tyler said here on Today.

"I don't see this year is going to be any easier for Indian carriers than last year. Fuel prices have risen. And there have not been any major structural changes in the industry which will help to offset that particular cost penalty," Tyler of International Air Transport Association (IATA) said in a press conference.

He said it was necessary to suspend Kingfisher Airlines from its clearing house to protect the system.

"The difficulties of Kingfisher are well known...We had to suspend Kingfisher from the travel agency clearing house. We think it is necessary to protect the whole system. It is the system we operate on behalf of hundreds of airlines. We are now discussing with Kingfisher the term on which we can reinstate the programs. The discussions are continuing" the
IATA chief said.

IATA had to suspend Kingfisher after it failed to provide IATA with a cash deposit, required to continue its participation in the BSP and the CASS.

The required cash deposit was intended to ensure the airline is able to meet its financial obligations in the BSP and the CASS, an IATA spokesperson earlier said in a statement
from Singapore.

Tyler also said that the high User Development Charges at airports in Delhi and Mumbai should be relooked by the Government in order to stop further damage to local and international airlines connectivity and foreign tourist arrivals.

"AERA proposed 340 per cent of increase in the UDF at Delhi airport. If it materialises, Delhi will become the most expansive airport. India's aviation industry is sick. Adding a USD 300 million headache to it will pull it in intensive care from a cost perspective," Tyler said.

He added that it is also estimated that a 5-7 per cent decrease in demand will result from the move.

"...it will come with a fall in tourist arrivals and further damage to local and international airline connectivity," the IATA chief said.

He added IATA is also concerned about the application of 10.3 per cent service tax on air tickets as well as to service that airlines purchase like landing and air navigation fees.