No threat of Kingfisher shutting down, clarifies DGCA

The aviation regulator, which met with beleaguered Kingfisher Airlines and Air India Express to discuss issues relating to passenger safety, said there was no threat of any carrier’s licence being cancelled, a top official said on Thursday.

Bharat Bhushan, director general of civil aviation, said airlines were going through financial difficulties, and the regulator had asked airlines to meet its concerns in a time bound manner.

Meanwhile Kingfisher Airlines clarified in a statement that the DGCA didn’t find any major concerns over the airline’s safety and had sought a specific timeline of recapitalisation efforts to get grounded aircraft back in the air. It also asserted that the airline has adequate number of pilots and engineers to operate services.

The statement further says that “safety is of paramount importance and that our scheduled flights will continue to operate with utmost safety in full compliance with regulatory requirements and stipulations in this regard.”

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The DGCA had sought explanations from carriers on safety concerns highlighted by the regulator’s internal report which said that cash-strapped Kingfisher Airlines is unsafe and should be wound up, according to a Times of India report.

“A reasonable case exists for withdrawal of their (Kingfisher’s) airline operator permit (licences) as their financial stress is likely to impinge on safety,” the report said, according to the newspaper. “A prima facie case exists for restricting their operations in view of safety issues.” The newspaper claims to have accessed the report.

In addition,the regulator’s report found “major distress issues” with Jet Airways, JetLite, SpiceJet and GoAir. It alsomentioned “some rapid growth issues” for IndiGo. Air India Express has also come for scathing criticism in the report, according to the newspaper, with the regulator recommending restrictions on their operations because of safety concerns as well.

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[caption id=“attachment_172914” align=“alignleft” width=“380” caption=“The airline, meanwhile, denied that the DGCA’s report recommended cancelling its licence. Reuters”]  [/caption]

The report said nearly one-third of Kingfisher Airlines’ 64 aircrafts have been grounded due to a lack ofspares, engines and other components. “There is a shortage of 12 engines for 7 aircraft of A-320 family and 16 engines for 9 aircraft of ATR family. Most of spares of ATR aircraft are not available… The airline is doing cannibalisation of parts. (For) example, 619 items have been removed from A-320 aircraft VT-ADR till November 17, 2011,” the report said, according to The Times of India.

During the winter schedule of 2011, the airline also did not operate 175 daily flights due to non-availability of aircraft, the report added.

The airline, meanwhile, denied that the DGCA’s report recommended cancelling its licence.

To be honest, the suggestion by the DGCA with regard to Kingfisher doesn’t come as a surprise: the cash-strapped airline has been struggling to survive over the past few months. Cabin crew have been deserting the airline in droves and it has been struggling to meet payments from everyone ranging from fuel suppliers and aircraft leasing firms to staff.

The airline has also been struggling under the weight of its Rs 7,000-plus crore debts, besides increased expenses over fuel costs and other operations-related expenses.

On Wednesday, media reports said Kingfisher Airlines was mulling 2,000 jobs cuts and longer working hours for staff, among other options. More than 200 cabin crew have left the airline in recent months and those who remain have not been paid salaries on time.

It has been trying to get banks to inject additional cash, but after participating in a debt restructuring deal earlier this year, most of them are wary about doing something similar again. The airline is alsosaid to be in talks with banks and some potential investors for fresh funds.

Kingfisher reported a net loss of Rs 469 crore for the July-September quarter, although its revenues rose by 10.2 percent to Rs 1,528 crore. In the last financial year ended 31 March, 2011, it posted a loss of more than Rs1,000 crore.