Dues unpaid: Global airlines body shuts out Kingfisher
International Air Transport Association also asks travel agents not to book Kingfisher tickets.
Cash-strapped Kingfisher Airlines was today suspended for non-payment of dues for the second time in just over a month by the IATA from participating in a system which enables the airlines to settle their interline billings globally.
“IATA has suspended Kingfisher Airlines’ participation in the IATA Clearing House ICH. This is because the airline did not settle their ICH account within the stipulated deadline,” the International Air Transport Association’s Assistant Director Corporate Communications Albert Tjoeng said in a statement from Singapore.
He said,”Kingfisher’s participation in the ICH will be reinstated after the airline fulfills the ICH requirements.”
This is the second time since February 2 that the cash -strapped carrier has been suspended from ICH for not paying its dues. Earlier,its status was restored ten days later. It has now been suspended once again,IATA sources said.
Airlines and airline-associated companies join the IATA Clearing House to settle accounts for services provided by them to other airlines or firms.
The bank accounts of the airline,which is struggling to stay afloat,have been frozen by the income tax,service tax and excise and customs departments for failing to pay dues.
Crisis-ridden Kingfisher Airlines had last month also delayed joining the global airlines’ grouping ‘oneworld’ due to its precarious financial position. It was slated to
formally join the airline alliance on February 10.
The airline,which never made a profit since its inception in May 2005,reported a net loss of Rs 444.26 crore in the December quarter. It suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore apart from over Rs 4,000 crore of accumulated losses and a restructured long-term loan of around Rs 7,000 crore.
With oil companies blocking fuel supplies and disrupting its flight schedules in the past few weeks,troubles have mounted for Kingfisher as its lenders have insisted they would not pump in money unless the promoters infused fresh equity.
The air carrier is understood to have been told by the bankers that it should get at least 25 per cent of the Rs 3,000 crore loan it is looking for in the form of fresh equity.
With the Airports Authority of India also putting Kingfisher on a ‘cash-and-carry’ mode for aeronautical services,its promoter and UB Group chief Vijay Mallya is likely to meet AAI top brass to clear its position on the huge dues to the state-run airports body.
As the airline has been operating a curtailed flight schedule,it also faces the prospect of losing a large number of its prime flying slots.
Though the government has made it clear that it does not want any airline to close down,it does not rule out suspension of its flying licence if safety is neglected.
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