DGCA rules out grounding Kingfisher, asks for revised schedules

New Delhi: Just minutes after the meeting between the management of Kingfisher Airlines and the DGCA ended, the Director General of Civil Aviation said it has given the troubled airline until tomorrow to come up with an amended schedule for flights and said there was no question of grounding the airline presently.

DGCA EK Bhushan said,“To ground an airline and that too of the size of Kingfisher will only cause more inconvenience to passengers.”

The regulator also has ordered a special safety surveillance on Kingfisher, he said, although he added that there were no problems or worries about aircraft safety..

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

On the issue of flight disruptions, Bhushan said that all passengers will be informed about flight cancellations in advance. He also directed the airline to refund passengers for the cancelled flights. " For cash payments the refunds must be given on the spot," said Bhushan.

The claim that the Income Tax department freezing the accounts of Kingfisher Airlines had affected schedules was not acceptable, Bhushan said. DGCA said as per information received bu the airline, only 28 of 64 aircraft are operational at present. He added that as per the airline’s winter schedule around 400 flights should have been operational. But the airline has truncated this number to only 175 flights a day now.

The DGCA added that there are serious concerns over the non-payment of employee salaries. But the management has now promised that all December salaries will be paid by the end of February and that all wage arrears will be cleared by 20 March.

After the meeting, the CEO of Kingfisher Airlines also said that they have sufficient pilots and cabin brew for their operations. " No flight has been cancelled for want of pilots," said Sanjay Aggarwal, CEO Kingfisher. The DGCA, however, said they are still looking into how many pilots had resigned and how many had left the airline.

Kingfisher closed down its Kolkata operations because staff there had not been paid salaries for months. The DGCA has asked the government to review the acceptability of this step.

Meanwhile, Kingfisher Airlines has also assured the DGCA that normal flight schedule will resume in another five to seven days.

Earlier in the day, Vijay Mallya who owns a majority stake in Kingfisher, said he was determined to keep the airline flying and blamed a cash crunch on the tax authorities who have frozen its bank accounts over outstanding dues.

The airline’s banks, which took a 29 percent stake in an earlier debt-for-equity swap, are unwilling to restructure their loans further until fresh equity is found.

Mallya blames that on government policy, which is now debating a proposal to allow foreign airlines to acquire up to a 49 percent stake in domestic airlines but for now bars foreign direct investment in Indian carriers.

“We have been requesting working capital from our consortium of bankers for a long time but the consortium of bankers took the view that the government policy was not favourable to the industry,” he said.

Lenders met last week to discuss a proposal from SBI Capital Markets, the investment banking arm of State Bank of India, to extend lines of credit to the beleaguered carrier.

“Whatever we have been seeing in the media in the last two days has only added fuel to fire,” said a senior official at state lender Bank of Baroda, which has loans of more than Rs 500 crore to Kingfisher Airlines.