Mallya says sorry, but KF cancellation spree goes on

Airline blames seizure of bank accounts for crisis

Kingfisher Airlines (KFA) has, for the first time since December, attributed its flight disruptions to the seizure of bank accounts by the income tax (I-T) department.

Kingfisher Airlines Chairman Vijay Mallya in an interview with NDTV has apologised to the public. The airline’s statement on Saturday said that it had a “good meeting” with its bankers.  “We confirm that our bank accounts were attached by the tax authorities. However, this has happened in the past not only to us but also to Air India. We have resolved issues before and will do so again,” the statement had said.

Earlier, the private airline had said many factors, including “bird-hits,” were responsible for flight disruptions.

The  statement said the seizure of bank accounts “has severely affected” the airline’s ability to make operational payments leading to the present curtailment, forcing it to revise its schedules.

Mallya has rubbished reports about the airline shutting operations. “The airline will not be closed down unless some government agency wants to ground us,” he said.

This is the second time that the I-T Department has resorted to freezing the accounts of the Mallya-led airline. In December, 11 accounts were frozen as the airline had failed to pay service tax. They still remain frozen.

Mallya was quoted as saying that the freezing of accounts should have been done in phases. The I-T Department’s sudden move has caused problems.

The airline’s statement said: “We are in talks with the tax authorities to agree to a payment plan and get the bank accounts unfrozen at the earliest. We are appealing to them to see reason that inconvenience to the travelling public is not in anybody’s interests.”

On a day when the loss-making airline operated only 16 of its 64 flights, its statement said: “We will appear before the DGCA tomorrow and submit all details they want and also a plan to restore the full schedule.”

The statement conceded that about 15 per cent of its flights operating consistently for the past three months have been cancelled. On Monday, 11 flights from Bangalore to Coimbatore, Vijayawada, Mangalore, Chennai, Hyderabad, Mumbai, Udaipur,  Kochi and Delhi were cancelled.

Around 12 Bangalore-bound flights from various destinations like Hyderabad, Thiruvananthapuram, Mangalore and Mumbai were cancelled. The airlines added that employee salaries can be paid once the bank accounts are released.

Reiterating that it had not approached the Centre seeking a bailout plan, the airline said: “We understand that certain positive decisions were taken at a recent GOM meeting which will benefit the industry and also Kingfisher Airlines. We have adequate numbers of flight crew and cabin crew to operate our schedule of flights.”

Kingfisher is understood to have requested the consortium led by State Bank of India for a working capital support of Rs 200 croe to Rs 300 crore. It has suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore.

Civil Aviation Minister Ajit Singh has ruled out any financial bailout. At least 34 pilots have quit in the last five days with the total number rising to about 80 since last October, according to industry sources.