Seven years after it started operations, the apex civil aviation regulator, the Directorate General of Civil Aviation (DGCA), on Saturday suspended the operating licence under provisions of the Aircraft Act of the financially crippled private carrier Kingfisher Airlines (KFA) as it failed to convince the regulator with a plan for financial and operational revival.
Suspension of flying licence implies an immediate halt to all bookings on the entire Kingfisher network as well as through travel agents. “Kingfisher Airlines’ licence was suspended keeping in mind passenger safety,” Civil Aviation Minister Ajit Singh told media after Saturday’s development. The scheduled operator permit of Kingfisher airline will remain suspended till further orders.
Owned by flamboyant liquor baron and billionaire Vijay Mallya the airline is saddled with losses to the tune of `8,000 crore and a debt burden of `7,000 crore. A large part of the debt has not been serviced by Mallya since January.
The airline has failed to pay its employees in the past six months, owes crores to different airport operators and oil companies and the airline has been facing a lock out since October 1 as it employees stopped attending duties demanding wages that have been pending for the past seven months now.
On being asked why KFA’s license was suspended the officials said “The government did not want a situation where the airline which already was on cash-and-carry mode for almost all service providers re-starts operations and then keeps flying in fits and starts as has been happening since last year-end.” The airline first came under the scanner in earlier in July when the then DGCA Bharat Bhushan asked the airline management why its licence should not be cancelled, Bhushan was removed as DGCA for having asked a pertinent question. The airline was later issued a show cause notice on October 5 asking why its operating licence should not be suspended or cancelled as it failed to adhere to its flight schedules inconveniencing passengers for past 10 months. The airline was given 15 days to reply but failed to convince the regulator. The DGAC had on Friday also disapproved the winter schedule submitted by the carrier.
Since it started operations in May 2005 the airline has never made profit. It suffered losses of Rs 1, 609 crore in 2008-09, Rs 1,647 crore in 2009-10, Rs 1,027 crore in 2010-11 and Rs 732 crore in 2011-12.
The permit would remain suspended till such time that Kingfisher submits a concrete and reliable plan to re-launch its scheduled operation to the satisfaction of the DGCA.
To resume operation the airline will have approach the DGCA. The regulator will have to convince itself that the airline is fit for operations and will be able to pay its staff and adhere to all the mandatory safety measures as required.