Thursday, November 10, 2011

Aviation regulator issues notice to Kingfisher after flights cancellation

Aviation regulator DGCA today sent a show-cause notice to Kingfisher Airlines as it cancelled at least 80 flights over the past three days saying it was taking some of its aircraft off flight schedules to add business class seats on them.

"We have issued a notice to them under Rule 140(A) of Aircraft Rules," DGCA chief E K Bharat Bhushan told PTI here.

In the notice issued today, the Directorate General of Civil Aviation (DGCA) asked the airline to show cause why it had not taken the regulator's prior approval to curtail its flight schedules as is required by this rule.

Under it, an airline has to obtain DGCA's concurrence before starting a new route or discontinuing a flight at least a week before taking such a step.

The DGCA also asked the Vijay Mallya-owned carrier on what steps it has taken so far to take care of the passengers booked in the flights cancelled in terms of returning their airfares, accommodating them in their alternate flights or providing them alternate modes of transportation.

The aviation regulator, through the notice, asked Kingfisher whether it had kept in view the provisions of Civil Aviation Requirement on the "facilities to be provided to passengers in case of denied boarding, flight cancellations and flight delays".

The airline, which cancelled about 30 flights today, has said in a statement that "for a limited period, these flights are either being cancelled or clubbed with other Kingfisher flights in a well-controlled and pre-determined manner.

"In continuation of our earlier announcement to focus on the full-service market, KFA has initiated reconfiguration of its aircraft."

While three oil companies -- HPCL, IOC and BPCL, have stopped granting credit to Kingfisher for lifting jet fuel and put it on a cash-and-carry payment mode, Kingfisher CEO Sanjay Agarwal had last night told PTI that the situation was much better now.

"Our unreserved exposure (vis-a-vis the oil companies) now is not even 10 per cent. It is much better than before. On top of this, the oil companies also have corporate guarantees from the UB Group, which owns the airline."

Kingfisher has suffered a loss of Rs. 1027 crore in 2010-11 and has a debt of over Rs. 7057 crore.

Aviation sources said the airline has grounded eight of its leased turboprop ATR aircraft. Airport operators, too, are putting pressure on the airline to clear their dues relating to airport and other charges.

http://profit.ndtv.com

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