DGCA re-audits Kingfisher,dilutes serious violations

First audit’s findings,showing withholding of information by the airline

Written by Ajmer Singh | New Delhi | Published:August 9, 2012 1:43 am

A financial audit of Kingfisher Airlines conducted late last year by the Directorate General of Civil Aviation (DGCA) had found that Vijay Mallya’s crisis-hit carrier cancelled more flights than it had reported to the regulator,scrapped flights to the Northeast without approval,withheld information about grounded aircraft when schedules were approved,and did not even list more than 100 approved flights on its systems.

The alleged violations could have led to the airline losing its flying permit. But in an unusual move,a second audit was conducted a month later by a new team and many findings of the previous audit were discarded or diluted. The Indian Express has accessed both audit reports.

The DGCA,however,denies Kingfisher was audited twice. “A financial surveillance of all airlines was conducted from November to December and no re-audit was carried out in the case of Kingfisher,” said Lalit Gupta,a DGCA deputy director general responsible for financial surveillance and scheduling.

Arun Mishra,who took over as DGCA chief recently,said he was not aware of the issue and would need to check on it.

DGCA officials said the practice of conducting annual financial audits began in 2010-11. According to the first audit,conducted in November by a Mumbai-based team of the DGCA,Kingfisher had under-reported its flight cancellations during August,September and October 2011. While the airline told the DGCA that 140,282 and 256 flights were cancelled respectively in these three months,the audit of Kingfisher’s computer network found 308,326 and 344 flights cancelled respectively.

The airline had been allowed to operate 418 daily flights during the winter schedule which started on October 30,2011,but Kingfisher had not even listed 106 of these flights on its computer network. This,one senior DGCA official alleged,could amount to squatting as some airline operators are known to indulge in such practices to prevent competitors from getting their unused slots.

The 418 flights were approved on a fleet strength of 57 aircraft even though 20 of them had been grounded for varying periods,a few for as long as two years.

Besides,the audit report said that 100 Kingfisher pilots had resigned,essential flights to the Northeast cancelled without the approval of the DGCA,parts of some planes were being removed for use in other aircraft on a large scale,salaries were not paid and the company was under financial stress. The number of flights operated to the Northeast is one of the benchmarks used to allow airlines to fly on lucrative trunk routes in the rest of the country.

This report,however,was not forwarded to then DGCA chief E K Bharat Bhushan. The second report was forwarded to Bhushan but not shared with the team which conducted the first audit,sources said.

The second audit,conducted by a Delhi-based DGCA team on December 15 and 16,made no mention of the variation between the flight cancellation data provided by the airline and actual cancellations. It said only 24 pilots had resigned and added that 20 aircraft were grounded but did not mention the duration.

The second audit report said Kingfisher had been allowed to operate 421 flights during the winter schedule but 175 of those slots were not utilised. However,it made no mention of the 106 flights that were not even listed on the airline’s computer network,as the first audit had found.

Also,the second audit report made no mention of flights to the Northeast being cancelled.

While the first audit made serious observations about the available aircraft and the allocation of flights for the winter schedule,the references were missing in the second audit report.

Subsequently,the DGCA resorted to a process called maintaining “schedule integrity” through which an airline is allowed to operate flights based on the number of fully available aircraft. As a result,Kingfisher’s winter schedule was pared to 243 daily departures and the summer schedule,effective March 25,was further cut to 120 daily departures using 16 aircraft.

“We are responsible to the DGCA and will respond to them only if we receive any questions,” Kingfisher spokesperson Prakash Mirpuri said. “We will not be drawn into any mischievous controversy and will not offer any comment on media speculation. We are operating under utmost safety under the supervision of the DGCA.”

Bhushan,who was abruptly removed as DGCA chief earlier this month,said he was not aware of the November audit. “I am out of the ministry and would not like to comment,” he said.

AUDIT FINDINGS,NOVEMBER 2011

* “Lower number of flight cancellations reported to DGCA”

* “418 daily departures sanctioned for 2011 winter schedule but 106 of them not listed on Kingfisher computer network”

* “2011 schedule approved for 57 aircraft while 20 of them were grounded,some for two years; 100 pilots resigned”

* “Flights to Northeast cancelled”

AUDIT FINDINGS,DECEMBER 2011

* No mention of variation in flight cancellation data

* “421 daily departures sanctioned for 2011 winter schedule,of which 175 slots unutilised”. No mention of the 106 departures not listed

* “20 aircraft grounded”,but duration not mentioned

* No mention of flights to Northeast being cancelled

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