Kingfisher Airlines set to lose flying licence today
Kingfisher Airlines, which has been grounded since October, is set to
lose its flying licence on Monday. Aviation regulator, the Directorate
General of Civil Aviation, had suspended Kingfisher's licence to fly in
October after months of cancelled flights and staff walkouts.
Last week, Kingfisher Airlines had filed a revival plan with the DGCA.
Chairman Vijay Mallya's United Breweries group said it will invest
Rs. 652 crore in the airline as part of the turnaround plan.
However, Aviation Minister Ajit Singh said Kingfisher Airlines has
failed to present regulators with a clear funding plan under a proposal
to get it flying again. UB "did not say they are going to give anything"
to Kingfisher, which has estimated debts of $2.5 billion, Mr Singh
said.
The minister did not specify if the proposal, to resume operations with
five planes, had been rejected. But he noted that the airline owed
money to banks, staff, airports, and tax authorities.
All those stakeholders needed to be convinced the re-launch plan was
viable before the DGCA allowed the airline to fly again, Mr Singh said.
The DGCA wants all creditors to agree to the revival plan submitted by
Kingfisher, and has not decided on its course of action, sources told
Reuters.
The carrier can apply to renew its licence within two years from the day it expires.
Kingfisher shares traded lower for a fourth day in a row. The stock was down 0.2 per cent to
Rs.
15.25 on the BSE at 09.47 a.m. Other aviation stocks - Jet and SpiceJet
- also traded lower, down 0.85 per cent and 1.9 per cent respectively
in a flat market.
Kingfisher shares are up 15 per cent for the month since November 30, recovering sharply from their all-time low of
Rs. 7.05 hit in August.
Launched in May 2005, Kingfisher has not reported a profit ever and has bank debts of more than
Rs. 7,000 crore and unpaid interest since January apart from over
Rs. 1,000 crore in vendor and tax arrears. It also has accumulated losses of nearly
Rs. 10,000 crore, apart from the salary dues of the past eight months.
Kingfisher, which has been trying unsuccessfully to raise fresh cash
for more than a year, is hoping to tap Etihad Airways as an investor.
The Gulf carrier, which is seeking to widen operations in India and
other Asian markets, is in the final stages of talks to buy part of
either Kingfisher or Indian rival Jet Airways, an Indian government
official told Reuters earlier.
(Source: NDTV and With inputs from Reuters. First published on Dec 31, 2012)
