Kingfisher CEO appears before DGCA

Kingfisher Airlines CEO Sanjay Aggarwal and other senior staff members of the airline have arrived at the DGCA to explain its large scale cancellation of flights on Monday. The airline cancelled almost 40 flights across the country, including those to Bangkok, Singapore, Kathmandu and Dhaka, leaving hundreds of passengers stranded at various airports across the country. The cancellations included 14 from Mumbai, seven from Kolkata and six from Delhi.

The airline has cancelled another 30 flights on Tuesday even as the top brass of the cash-strapped carrier appeared before the DGCA. Thirteen flights were cancelled from Mumbai, 8 were

cancelled from Kolkata and four from Delhi leaving many passengers stranded. The major air route of Mumbai-Delhi was the worst-hit with maximum cancellations and clubbing of flights.

Civil Aviation Minister Ajit Singh speaking to the media, refused to comment on what direction the talks would take, saying that they were merely seeking an explanation from Kingfisher on as to why they did not inform passengers or the DGCA that they were canceling flights. “We want to know why they broke the rules”, he said.

After hours of silence, Kingfisher admitted late on Monday that the real reason for the cancellation of their flights was the attachment of their bank accounts by the IT department. In a statement the company also said that they were presently in talks with the tax department about a pay back plan and the eventual unfreezing of the accounts, and confirmed that they were not seeking a government bail-out. Earlier the reasons for cancellation given out by the carrier included bird-hits suffered by its planes. The statement added that they were willing to give the DGCA all the information it required, and they hoped to return to their full flight schedule as soon as possible, though no concrete time frame was specified in this regard. ( Read more)

In December, tax officials froze 11 bank accounts of Kingfisher for failing to pay service taxes.

Bank accounts for the company were frozen for two days in November as well, but were subsequently opened up after the airline promised to pay the taxes.

Kingfisher has so far failed in efforts to attract fresh equity. Banks own about a quarter of its shares and State Bank of India, the lead bank, refuses to lend more without an equity injection.

But the airline said it was confident it would be able to raise new funds.