DGCA summons Kingfisher officials, govt says no bailout

Kingfisher's CEO and top officials were summoned today by the DGCA to explain the large-scale disruptions in the operations of the cash-strapped carrier even as government ruled out any bailout.

The Directorate General of Civil Aviation (DGCA) has asked senior officials of the airlines, including CEO Sanjay Aggarwal, to appear before it tomorrow to explain the cancellations.

More than 20 flights were cancelled today. About 80 flights of the carrier from six metro cities did not operate yesterday leaving hundreds of passengers stranded.

The ailing carrier had till late last evening failed to file a report on the number of flights it had cancelled since Friday night to the DGCA.

Civil Aviation Minister Ajit Singh made it clear that government will not bailout the airline.

"No, government is not going to have any bailout," the Minister told reporters, adding, "Government is not going to ask banks or private industry for that matter".

"Recently government had seized their bank accounts also. So our first concern is that flights which are ongoing, passenger safety should not be compromised and then let us see what reply they give. DGCA is inquiring into it," Singh said.

He said Kingfisher is facing several financial problems.

"Day before yesterday, as they did not give salary to their employees for many months, people went on strike in Kolkata. Naturally, the flights got cancelled," he said.

DGCA's role, he said, was to see that there are no questions on passenger safety.

Kingfisher was holding talks with banks and they have given their business plan.

Government has made some changes recently including in respect of aviation fuel policy whereby airlines could directly import jet fuel, Singh noted.

The Minister said Kingfisher's business plan maybe viable in this respect but it was for the banks to decide how much money should be given.

DGCA chief E K Bharat Bhushan said, "We have received reports about large-scale cancellations. They are bound to inform us when they cut their schedule. But they have not done so."

The DGCA has gathered information from all centres across the country of the cancellation and major delays of Kingfisher services. Based on this information, the aviation regulator has decided to take action under rules.

Under Rule 140(A) of the Aircraft Rules, 1937, operators require to have prior approval of DGCA to curtail their flight schedules.

Bhushan also said that messages have been sent by the DGCA to all other airlines to accommodate all passengers stranded due to these cancellations by Kingfisher.

"They have to do this without enhancing the fares," he said when asked about the severe hardships being faced by the passengers of cancelled Kingfisher flights.

The airline has admitted to curtailment in its flight schedule, saying such a situation would continue for the next four days.

"We will operate the full schedule on our booking system within the next four days," Kingfisher spokesman had said.

The reasons for cancellation given out by the carrier included bird-hits suffered by its planes.

The airline was operating only about 160-180 flights out of its already curtailed winter schedule of 240.

The sources said operations from Tier-II and Tier-III cities are likely to be affected until March-end.

It had also said that the I-T department had frozen its account due to non-clearance of tax dues.

"We confirm that our Bank accounts were attached by the tax authorities. However, this has happened in the past not just to us but also to Air India. We have resolved issues before and will do so again," the Kingfisher spokesman had said.

The airline began cancelling its flights as it held talks with bankers to finalise a deal for funds. Kingfisher posted a Rs 444 crore loss for the third quarter.

The airline has suffered a loss of Rs 1,027 crore in FY11 and has a debt of Rs 7,057.08 crore, latest figures show.