India's troubled Kingfisher scraps more flights

Mar 13, 2012 - 10:39
  • A Kingfisher Airlines aircraft makes its final approach for landing at the Chatrapati Shivaji International Airport in Mumbai on March 9, 2012. PHOTO/ AFP

India's cash-strapped Kingfisher Airlines cancelled nearly a fifth of its flights Monday, including at least one international route, after its staff staged a strike over unpaid wages.

Kingfisher said its schedule was also affected after the company was suspended last week by the International Air Transport Association (IATA) from a global payments system.

The airline issued a statement blaming "employee agitation on delayed salaries" and the IATA suspension for the cancellations, which it said would hit close to 20 percent of its already reduced service.

Later in the day Kingfisher said "despite all challenges" it operated 145 out of the around 175 flights it was expected to operate.

Eleven flights from Mumbai were cancelled and several other airports including New Delhi were also hit and at least one international flight -- from Delhi to Dubai -- was among the flights scrapped.

A number of its pilots have stayed away from work in recent weeks and at least 60 pilots have already left the airline to fly with rivals according to the Press Trust of India news agency.

The airline last week said its chief executive met the striking pilots and appealed to them to join work so that operations are not affected.

Kingfisher, which has never turned a profit and has sunk deeper into debt since its launch in 2005, has often run a reduced flight schedule in recent weeks amid growing fears for its survival.

The carrier, controlled by Indian liquor baron Vijay Mallya, owes suppliers, lenders and staff millions of dollars.

Mallya told The Week magazine published on Monday that the airline needed $200-250 million immediately to secure its future, and he pushed for foreign ownership restrictions to be lifted in the aviation sector.

"Additional equity can and must be part of the plan," Mallya said. "That is why I have been requesting the government to reconsider its ban on foreign airlines investing."

"I have never asked the government for a rupee... (but) the airports are government-owned. The fuel supplier is government-owned. The banks are government-owned. It's in their hands," he said.

Mallya pointed to high fuel prices, taxes and the plunging rupee as the culprits for the current crisis -- not bad management.

Kingfisher's bank accounts have been frozen by Indian authorities due to non-payment of taxes,

The airline said it expects to return to its full schedule shortly, but has given no specific timeframe.

The airline's net loss widened sharply to 4.44 billion rupees ($88 million) in the three months to December from a loss of 2.54 billion rupees a year earlier, while its debt totals at least $1.3 billion.

Kingfisher's market share has slid to fifth position at 11.3 percent, from second earlier, according to data at the civil aviation regulator's website.

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