Kingfisher's membership to join oneworld, a global airline alliance, has been put on hold, impairing its revival efforts. Two months ago, the airline had announced its admission into the club. Kingfisher was to join the alliance on February 10.
With a severe cash crunch, the airline has been unable to service debt. Several of its lenders have treated the airline's account as non-performing asset. Several of Kingfisher planes are grounded for want of spares.
Two days ago, the International Air Transport Association's Geneva-based clearing house suspended the airline. The clearing house provides a mechanism for airlines to settle bills for tickets sold on other carriers' routes.
Suspension could mean refusal by other airlines to accept tickets issued by Kingfisher and the objective of joining the alliance would get defeated, according to travel industry sources.
Kingfisher, however, claimed suspension arose due to an internal systems failure, which did not allow it to credit dues. The airline claimed the suspension would be revoked soon.
Within India, Jet Airways has stopped accepting Kingfisher passengers for the last few months and it is learnt Air India, too, is following suit.
In a statement, promoter Vijay Mallya said, "In light of the many priorities centred around Kingfisher Airlines' re-capitalisation efforts, we felt it prudent to defer our entry into the alliance. This will allow us the opportunity to focus on issues at hand and look forward to being part of the oneworld alliance very shortly."