No plans to cancel licence of Kingfisher, says DGCA

Agencies/New Delhi

Kingfisher chief Vijay Mallya speaks to reporters after meeting Director General of Civil Aviation Bharat Bhushan in New Delhi yesterday

India’s civil aviation regulator said yesterday authorities had no plans to cancel the flying licence of debt-laden Kingfisher Airlines and that the carrier had a revival strategy. The comments came after Aviation Minister Ajit Singh had told reporters that “if required, the licence can be cancelled as passenger safety is a top priority.” “We have to look at how they are meeting safety norms. The regulator continues to examine each Kingfisher flight for safety,” Singh told reporters. The airline, which has never turned a profit since its launch in 2005 and owes millions of dollars to suppliers, lenders and staff, has cancelled scores of flights recently due to a cash crunch. “As of date, there are no plans to cancel the (Kingfisher) licence,” Director General of Civil Aviation (DGCA) Bharat Bhushan said in New Delhi after meeting Kingfisher chief Vijay Mallya, who also runs a global liquor empire. “There is no cause for panic and no deadline has been imposed on them. Our field officers will monitor the situation as it evolves,” Bhushan said. Mallya had been summoned to meet Bhushan in the capital to explain the Bangalore-based airline’s situation and discuss a recovery plan. “Kingfisher is severely hamstrung... things are difficult but he (Mallya) has a plan in place which he has discussed with me. I cannot disclose more about this due to confidentiality issues,” Bhushan said. Bhushan, however, added that he was unsure if Kingfisher would ever be able to repay its liabilities. “I have to be frank - I don’t get their assurance even now.” Bhushan earlier told television news channel NDTV that Kingfisher had said it was unable to live up to its earlier flight scheduling commitments. “It’s a completely difficult situation which cannot go on like this. I would not like to speculate more,” Bhushan said. Kingfisher shares plunged 12% yesterday on investor worries the airline would shut before retracing some of their losses to close down 5.22% at Rs19.05. The shares hit a record low of Rs17.55 in November. The carrier has cancelled nearly half of its flights due to a strike by pilots and its financial difficulties, running around 100 flights a day instead of its scheduled 175. Some of its pilots are on strike over unpaid wages. Kingfisher now operates 18 planes, Aviation Minister Singh told reporters. Before its cash squeeze, Kingfisher operated 64 aircraft. Just after the meeting with Bhushan, Kingfisher said it was grounding all its international flights to reduce costs after earlier this month announcing a partial shutdown of overseas routes, the Press Trust of India reported. The airline’s bank accounts have been frozen by authorities due to a failure to pay taxes which it collected from passengers. It also has been dropped by a crucial global payments and booking system run by the International Air Transport Association. Experts have blamed Kingfisher’s woes on a string of factors including too rapid expansion, high fuel costs and price wars among carriers. Mallya has promised a full recovery plan for the carrier shortly. On March 15 Mallya said the airline will come up with a firm operating schedule.“We will come up with a firm schedule which will have 100% certainty to it. In a few days time we will have a crystal clear plan, a road map covering all aspects from the trade, travelling public, employees. It will clearly show that Kingfisher can move ahead,” Mallya said after a meeting with his pilots in New Delhi.“The certainty of schedule will be maintained... There are other issues that affect schedule integrity which we need to take care of and we are in the process of addressing them seriously.”Mallya said new schedule envisages more flight operations on “many many more routes with daily flights.”“We require a process of stabilisation. We are already implementing various initiatives that we believe we need to take under the current environment.”In a separate development, Anil Kumar Ganguly, an independent director, quit the Kingfisher board on health grounds - the second director to exit within a week. Ganguly’s exit means all Kingfisher’s independent directors have now quit. Experts have blamed Kingfisher’s woes on a string of factors including too rapid expansion, high fuel costs and price wars among carriers.