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Oneworld Alliance defers Kingfisher’s entry

Cash-strapped Kingfisher has so far failed in efforts to attract fresh equity.

Written by Reuters | New Delhi | Published: February 4, 2012 12:39:51 pm

The joining of Kingfisher Airlines into the global airline grouping “Oneworld Alliance” was on Friday put on hold due to the financial crisis faced by the Vijay Mallya owned carrier.

The development came a day after the International Air Transport Association (IATA) suspended Kingfisher Airlines from its Geneva-based clearing house (ICH) due to non-payment of dues to airline members.

“Kingfisher Airlines and Oneworld today agreed to put the Airlines entry into the alliance on hold to give it time to strengthen its fiancial position,” a joint statement issued in Washington said on Friday night.

Kingfisher was slated to formally join the alliance on February 10.

“These are turbulent times for the arirline industry in India and in many other parts of the world. We have been working closely with Kingfisher over the past months and it has become increasingly clear recently that ther airline needs more time to resolve the financial issues it is confronting before it can be welcomed into Oneworld,” the allinace CEO Bruce Ashby said in a statement.

He said the airline would be inducted on a “new joining date once it is through with this current period of turbulence.”

Mallya said that in view of “many priorities centred around Kingfisher’s recapitalisation efforts,we felt it prudent to defer our entry into the alliance for a little while.”

“This would allow the ariline to focus on the issues at hand,” he said,adding,”We look forward to being part of the alliance very shortly.”

Kingfisher Airlines slid from a net loss of Rs 263 crore in the first quarter of 2011-12 (FY12) to a net loss of Rs 469 crore in the 2nd quarter of the fiscal. DGCA has also asked the airline to redouble its recapitalisation efforts and ensure that safety parameters are not compromised at any cost.

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