Kingfisher Airlines scrapped 16 flights this morning, extending a hellish weekend for its passengers. 12 flights out of Mumbai and four from Delhi were cancelled early today. The Chief Executive Officer of the airline, whose financial troubles are well-known, has been asked to meet the regulator for aviation, the DGCA, tomorrow morning.
Over the weekend, the airline cancelled nearly 50% of its flights, according to some estimates. A statement from Kingfisher blamed bird-hits for grounding many of its aircraft, an explanation that nobody’s buying.
Passengers in Delhi said information from the airline had been slow in coming; many said they landed up at the airport to learn that their flights had been cancelled. But in Mumbai, things were less chaotic than they were yesterday. There were fewer angry passengers at the airport, many having rescheduled their travel or just switched carriers.
Kingfisher has stopped its operations in Kolkata and cut down flight operations in the North-East. There are no flights listed today for Agartala, Silchar and Lilabari. From Mumbai, three flights to Hyderabad, two flights each to Ahmedabad and Delhi and one each to Kolkata, Chennai, Bangalore, Kochi and Lucknow have been cancelled today. From Delhi two flights to Chennai and one each to Kolkata and Bangalore have been cancelled.
This is the second time in four months that Kingfisher has cancelled a large number of flights without informing either the Directorate General of Civil Aviation (DGCA) or the passengers. The cancellations come amidst reports that the airline continues to be in deep financial trouble and that one of its bank accounts has been seized by income tax authorities.
"We have received reports about large-scale cancellations. They are bound to inform us when they cut their schedule. But they have not done so," DGCA chief E K Bharat Bhushan said, adding, "We are gathering information from all the centres. Once we get this, we will decide what to do."
Aviation rules require operators to have prior approval of the DGCA to curtail their flight schedules. Mr Bhushan said the DGCA had sent messages to all other airlines to accommodate passengers stranded due to the Kingfisher cancellations. "They have to do this without enhancing the fares," he said.
The disruptions are expected to continue for the next two or three days as the airline desperately seeks equity infusion. A group of 18 banks, led by the State of Bank of India, that have lent to Kingfisher met on Friday to discuss the carrier's financial state and sources said Kingfisher hoped the banks would provide it with some working capital soon. There is no official word from either the lending banks or the airline on this yet.
The Kingfisher management says that the cancellations are planned and that the airline will not shut down any existing operations.
Financial mess:
Kingfisher Airlines began cancelling its flights barely two days after posting a Rs 444 crore loss for the third quarter.
The debt laden carrier is simultaneously holding talks with bankers to finalise a deal for funds. However, lenders of Kingfisher failed to finalise a deal for providing additional funds to the company.
The 18 banker's consortium -- including SBI, Bank of Baroda and Corporation Bank -- are likely to meet again to decide on additional funding to the debt-laden airline.
Kingfisher owes an estimated Rs 1,500 crore to State Bank of India, about Rs 400 crore each to Corporation Bank and Bank of Baroda and Rs 380 crore to Federal Bank, among other lenders.
SBI had last month said it would be difficult for lenders to provide more funds, unless Kingfisher pays Rs 100 crore to restore a bank guarantee invoked after the carrier failed to repay its loans or makes good the default.
On Friday, auditors of Kingfisher Airlines had raised concern over its ability to stay afloat and said it would need to inject more money to remain a "going concern".
'Going concern' means that the firm in question would not go broke or be liquidated and remain operationally afloat in the foreseeable future.
In a quarterly report, owner Vijay Mallya said that the latest financial statement had been based on the premise that "the company is a going concern", but conceded that "the company has incurred substantial losses and its net worth has been eroded".
Kingfisher has suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore, latest figures show.
Over the weekend, the airline cancelled nearly 50% of its flights, according to some estimates. A statement from Kingfisher blamed bird-hits for grounding many of its aircraft, an explanation that nobody’s buying.
Passengers in Delhi said information from the airline had been slow in coming; many said they landed up at the airport to learn that their flights had been cancelled. But in Mumbai, things were less chaotic than they were yesterday. There were fewer angry passengers at the airport, many having rescheduled their travel or just switched carriers.
Kingfisher has stopped its operations in Kolkata and cut down flight operations in the North-East. There are no flights listed today for Agartala, Silchar and Lilabari. From Mumbai, three flights to Hyderabad, two flights each to Ahmedabad and Delhi and one each to Kolkata, Chennai, Bangalore, Kochi and Lucknow have been cancelled today. From Delhi two flights to Chennai and one each to Kolkata and Bangalore have been cancelled.
This is the second time in four months that Kingfisher has cancelled a large number of flights without informing either the Directorate General of Civil Aviation (DGCA) or the passengers. The cancellations come amidst reports that the airline continues to be in deep financial trouble and that one of its bank accounts has been seized by income tax authorities.
"We have received reports about large-scale cancellations. They are bound to inform us when they cut their schedule. But they have not done so," DGCA chief E K Bharat Bhushan said, adding, "We are gathering information from all the centres. Once we get this, we will decide what to do."
Aviation rules require operators to have prior approval of the DGCA to curtail their flight schedules. Mr Bhushan said the DGCA had sent messages to all other airlines to accommodate passengers stranded due to the Kingfisher cancellations. "They have to do this without enhancing the fares," he said.
The disruptions are expected to continue for the next two or three days as the airline desperately seeks equity infusion. A group of 18 banks, led by the State of Bank of India, that have lent to Kingfisher met on Friday to discuss the carrier's financial state and sources said Kingfisher hoped the banks would provide it with some working capital soon. There is no official word from either the lending banks or the airline on this yet.
The Kingfisher management says that the cancellations are planned and that the airline will not shut down any existing operations.
Financial mess:
Kingfisher Airlines began cancelling its flights barely two days after posting a Rs 444 crore loss for the third quarter.
The debt laden carrier is simultaneously holding talks with bankers to finalise a deal for funds. However, lenders of Kingfisher failed to finalise a deal for providing additional funds to the company.
The 18 banker's consortium -- including SBI, Bank of Baroda and Corporation Bank -- are likely to meet again to decide on additional funding to the debt-laden airline.
Kingfisher owes an estimated Rs 1,500 crore to State Bank of India, about Rs 400 crore each to Corporation Bank and Bank of Baroda and Rs 380 crore to Federal Bank, among other lenders.
SBI had last month said it would be difficult for lenders to provide more funds, unless Kingfisher pays Rs 100 crore to restore a bank guarantee invoked after the carrier failed to repay its loans or makes good the default.
On Friday, auditors of Kingfisher Airlines had raised concern over its ability to stay afloat and said it would need to inject more money to remain a "going concern".
'Going concern' means that the firm in question would not go broke or be liquidated and remain operationally afloat in the foreseeable future.
In a quarterly report, owner Vijay Mallya said that the latest financial statement had been based on the premise that "the company is a going concern", but conceded that "the company has incurred substantial losses and its net worth has been eroded".
Kingfisher has suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore, latest figures show.
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